China’s Central Bank continued to inject funds into the financial system through open market operations on Wednesday.
The People’s Bank of China said on its website that it has conducted four billion yuan (about 575.33 million U.S. dollars) of seven-day reverse repos at an interest rate of two per cent.
A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future
The move is aimed at keeping liquidity reasonable and ample in the banking system, according to the central bank.
Meanwhile, the central parity rate of the Chinese currency renminbi, or the yuan, weakened 369 pips to 6.9525 against the U.S. dollar Wednesday, according to the China Foreign Exchange Trade System.
In China’s spot foreign exchange market, the yuan is allowed to rise or fall by two percent from the central parity rate each trading day.
The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.
