China’s central bank conducted 568.2 billion yuan (about US$80.17 billion) of seven-day reverse repos at an interest rate of 1.7 percent Wednesday.

Xinhua News Agency quoted the People’s Bank of China as saying that the move aims to offset the impact brought by the expiration of the medium-term lending facility (MLF) and reverse repos, as well as to keep liquidity reasonable and ample in the banking system.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

The MLF tool was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.

Source: Emirates News Agency