The People’s Bank of China (PBOC) injected 324 billion yuan ($44.87 billion) through 7-day repo and reverse repurchase operations at an interest rate of 1.8%, as reported by Xinhua on Wednesday. This move aims to sustain liquidity in the banking system.
In this context, “repo” denotes a transaction where a dealer serves as a seller by borrowing money and providing securities as collateral. Conversely, in reverse repo, a dealer acts as a buyer by borrowing securities and lending money.
