The People’s Bank of China’s daily injections via reverse repos is becoming more flexible, which will better balance the supply and demand of short-term liquidity, the China Securities Journal reported citing analysts. The scale of reverse repos has been lowered to a few billion yuan from an integer multiple of 10 billion, and the frequency of changes has also increased, the newspaper said. The market should neither interpret the injection of CNY3 billion as a signal of tightening, nor should the injection of 12 billion yuan be understood as a signal of relaxation, the newspaper said citing Cheng Qiang, chief macro analyst of CITIC Securities. Compared with the scale of injections, the market should focus more on the interest rates of DR007, reverse repos and medium-term lending facilities, the newspaper said.
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