TEHRAN, Young Journalists Club (YJC) -China’s central bank lifted the interest rate on 63-day reverse repurchase agreements, or reverse repos, used for open market operations by 5 basis points on Tuesday, bringing it in line with other interbank rates adjusted in mid-December.
It’s the first time the People’s Bank of China (PBOC) has deployed the 63-day reverse repo to inject cash into the financial system since Nov. 30. The new rate was 2.95 percent, the PBOC said.
On Tuesday, the central bank injected 320 billion yuan ($49.69 billion) into money markets through 7-day, 14-day and 63-day reverse repos.
The PBOC nudged money market interest rates upward in December just hours after the Federal Reserve raised the U.S. benchmark.
The Chinese central bank has kept a tight leash on liquidity and rates via open market operations. Analysts say it has had a slight tightening bias as it has sought to discourage short-term borrowing as part of the government’s deleveraging campaign and keep China competitive during a U.S. rate tightening cycle.