2023-08-29 07:32:06
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Posted on: Tuesday, August 29, 2023 – 10:31 AM | Last updated: Tuesday, August 29, 2023 – 10:31 AM
The People’s Bank of China continued to pump large amounts of cash into the banking system for the second day in a row, as it pumped today, Tuesday, 385 billion yuan ($ 53.58 billion) through reverse repurchase operations for 7 days, at an interest rate of 1.8%, following it Yesterday, it pumped 332 billion yuan ($46.2 billion) through 7-day reverse repo operations, at an interest rate of 1.8%.
The state-run Xinhua news agency quoted the central bank as saying that this step aims to maintain acceptable and abundant liquidity in the banking system at the end of the month.
A reverse repo, known as a “reverse repo”, is operations in which the central bank buys securities from commercial banks through bidding, with an agreement to sell them back to them in the future.
This comes at a time when the Chinese authorities are taking a set of measures aimed at stimulating activity in various sectors of the economy, as the Central Bank issued national directives to ease the terms of mortgage loans for specific categories of buyers.
These changes will allow for lower down payments for the property paid by the buyer, and interest rates on the mortgage loan.
It is noteworthy that the real estate sector in China has been facing a severe crisis for some time, which led to the failure of many major real estate companies to fulfill their obligations.
The real estate crisis is currently threatening to push the Chinese economy as a whole into a further decline.
The Shanghai, Shenzhen and Beijing stock exchanges announced a reduction in the minimum guarantee rate for financing the purchase of securities from 100% to 80% as part of measures to strengthen the Chinese stock market.
The three exchanges said that this step, which was approved by the China Securities Regulatory Commission, will take effect following the close of trading on September 8, 2023.
For its part, the People’s Bank said that moderately reducing the minimum guarantee rate will help to make good use of the available funds.
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