The People's Bank of China will conduct 500 billion yuan worth of reverse repurchase agreements.

The People's Bank of China issued a notice on August 14th stating that in order to maintain ample liquidity in the banking system, the People's Bank of China will conduct 500 billion yuan of fixed quantity, rate bid, and multi-price bid reverse repurchase operations on August 15th with a term of 6 months. In that month, there will be 400 billion yuan worth of 3-month reverse repurchase agreements and 500 billion yuan worth of 6-month reverse repurchase agreements maturing. After conducting 700 billion yuan worth of 3-month reverse repurchase agreements on August 8th, the People's Bank of China will conduct another 500 billion yuan worth of 6-month reverse repurchase agreements on the 15th, meaning that as of the 15th, the People's Bank of China's total excess reverse repurchase agreements in August will amount to 300 billion yuan. Wang Qing, Chief Macro Analyst at Oriental Jincheng, believes that conducting reverse repurchase operations will help inject medium-term liquidity and send a signal of continuous reinforcement of quantity-based monetary policy tools.