China Skips Open Market Operations in Longest Stretch Since 2016

(Bloomberg) -- China’s central bank refrained from injecting cash with daily open-market operations for a 20th day, the longest stretch since 2016, as liquidity remains ample in the financial system.

The People’s Bank of China cited “reasonable and plentiful” overall liquidity as the reason for not injecting cash via reverse repurchase contracts Thursday. The development isn’t a sign of tighter monetary policy, analysts say.

The benchmark seven-day repo rate dropped 2 basis points to 2.63 percent as of 10 a.m. in Shanghai, while the overnight tenor fell 13 basis points. The yield on one-year government bonds was 2.54 percent, 13 basis points lower than its U.S. equivalent.

The PBOC started conducting open-market operations on a daily basis in 2016. Prior to that, it acted only twice a week.

©2018 Bloomberg L.P.