The PBOC's recently introduced overnight reverse repo looks more like a liquidity provision tool similar to outright repos and medium-term lending facility loans, says Xinquan Chen at Goldman Sachs Economics Research. The PBOC conducted the first 300-billion-yuan overnight reverse repo on June 29 and followed it with another 600-billion-yuan operation on June 30, while keeping the operating rate undisclosed, the economist notes. "The PBOC's decision not to disclose the rate likely aims to preserve the 7-day reverse repo rate's role as the main policy rate and to avoid confusing the market before the new tool becomes operationally mature," the economist says in a research note. (ronnie.harui@wsj.com)
Dow Jones Newswires
PBOC's Overnight Reverse Repo Looks More Like a Liquidity Provision Tool — Market Talk
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The PBOC's recently introduced overnight reverse repo looks more like a liquidity provision tool similar to outright repos and medium-term lending facility loans, says Xinquan Chen at Goldman Sachs Economics Research. The PBOC conducted the first 300-billion-yuan overnight reverse repo on June 29 a…