PBOC injects 600 billion yuan in overnight reverse repos

China’s central bank injected 600 billion yuan into the banking system on June 30 through its new overnight reverse repo operations, keeping the rate at 1.25%.

The move came one day after the People’s Bank of China used the tool for the first time, offering 300 billion yuan on June 29. The latest operation doubled that initial amount and reinforced the message that the central bank is willing to use the new facility quickly to support short-term funding conditions.

New liquidity tool

Reuters reported the June 30 move as an official PBOC statement. The overnight reverse repo operations are a newly introduced liquidity instrument, making the latest injection more than a routine open-market action.

By maintaining the overnight rate at 1.25%, the central bank signaled that it was expanding liquidity without changing the pricing of the facility.

Why it matters

The June 30 operation is notable because it followed the debut use of the tool immediately after launch. That sequence suggests the PBOC is prepared to scale up support quickly if it wants to keep short-term funding conditions steady.

The development matters for China’s banking system because it affects day-to-day liquidity and can shape how markets interpret the central bank’s willingness to intervene.

What to watch next

Questions remain about how often the PBOC will use the new overnight reverse repo tool and whether it will give more detail on the policy rationale behind the larger operation.

Market participants will also be watching for any further signals from the central bank on liquidity support or broader policy easing.