PBOC Rachets up Reverse Repos to Signal Enough Liquidity: Journal

The PBOC intended to keep the market from worrying about tightening liquidity when it on Wednesday ramped up the size of the 7-day repo purchases by CNY40 billion from a day ago to CNY50 billion, the Shanghai Securities Journal reported. Concerns for liquidity shortage were based on the incoming maturities of CNY1 trillion MLF and another CNY1 trillion reverse repos, the newspaper said. The central bank will use MLF and open market operations to offset the short-term liquidity gap, the newspaper cited analysts as saying. Increasing fiscal expansion towards year-end will also release CNY1.89 trillion and CNY3.81 trillion in November and December, which can fully absorb the remaining CNY1.79 trillion of government bonds to be issued, the Journal said citing Shen Xinfeng, the chief analyst at Northeast Securities.