PBOC adds CNY30 billion via seven-day reverse repos to rescue Chinese stocks

To calm nerves and stabilize the domestic equity market, the People’s Bank of China (PBOC) made massive liquidity injections into the financial system to stem the collapse in the Chinese stocks amid regulatory risks, per Bloomberg.

Key takeaways

“The PBOC pumped in 30 billion yuan ($4.6 billion) of liquidity into the financial system with seven-day reverse repurchase agreements, resulting in a net injection of 20 billion yuan on Thursday. “

“The operation marked the authorities’ first short-term cash addition of more than 10 billion yuan since June 30.”

“The yield on the most actively traded contract of 10-year government bonds fell the first time in three days after rising by the most in a year on Tuesday.”

Market reaction

Amidst conciliatory articles from the state-run media and the central bank’s supportive measures, the Chinese stocks opened in the green for the first time this week.