PBoC Injects 905 Billion Yuan via 7-Day Reverse Repo and 6,985 Billion Yuan Overnight to Support Liquidity

The Quick Take

• China's central bank conducted 905 billion yuan in 7-day reverse repo operations on September 29
• An additional 6,985 billion yuan in overnight reverse repo operations were simultaneously conducted
• The People's Bank of China fully satisfied primary dealer demand in fixed-rate quantity bidding
• The large-scale injection signals active liquidity management heading into quarter-end

The People's Bank of China executed substantial open market operations on September 29, 2026, conducting 905 billion yuan in 7-day reverse repo operations alongside a significantly larger 6,985 billion yuan in overnight reverse repo facilities. The operations used a fixed interest rate and quantity-based bidding mechanism, with the PBoC confirming full satisfaction of primary dealer demand. The scale of these injections reflects the central bank's active management of short-term liquidity conditions, particularly notable as the operations coincide with the approaching end of the third quarter.

The market implications of large-scale PBoC reverse repo operations are generally supportive for Chinese financial markets in the near term. By ensuring ample short-term liquidity, the central bank reduces interbank funding stress that could otherwise spill into money market rates and broader credit conditions. Quarter-end periods typically see elevated liquidity demand from Chinese financial institutions meeting regulatory requirements, making the PBoC's proactive injection a stabilising signal for onshore fixed income and equity markets.

Forward signals from PBoC open market operations will be closely watched as China navigates its monetary policy balance between supporting growth and managing financial stability risks. The continuation of large-scale liquidity injections without rate changes suggests the central bank favours quantity-based easing over price-based stimulus at this juncture. Investors should monitor whether these operations are rolled over in October, which would signal sustained accommodation beyond the quarter-end period.

Synthesized from 3 sources.