Overview
- The People’s Bank of China carried out its first overnight reverse repo on Monday, June 29, offering 300 billion yuan of cash to financial institutions.
- The PBOC did not publish the overnight interest rate and Reuters sources later reported it at 1.25%, which is 15 basis points below the seven-day reverse‑repo rate of 1.40%.
- At the same time the central bank injected 157.5 billion yuan through seven‑day reverse repos and left the seven‑day rate unchanged at 1.40%.
- The overnight operations use fixed‑rate, quantity‑based bidding that the PBOC pre‑announced for month‑end on June 29–30 to smooth predictable funding stress in the interbank market.
- Traders treat the move as a tactical liquidity tool that can lower short‑term bank borrowing costs and ease month‑end strains, but its lasting policy significance depends on repeated use and clearer official rate signalling.