The People's Bank of China said it will conduct overnight reverse repurchase agreements operations on Monday and Tuesday, as part of efforts to better manage short-term liquidity in the banking system.
The move follows comments by the PBOC Gov. Pan Gongsheng last week that the central bank would expand its short-term liquidity toolkit by introducing overnight reverse repo operations and narrowing the interest-rate corridor for its temporary repo and reverse repo facilities.
The PBOC said Thursday that the overnight reverse repos will be conducted through fixed-rate, quantity-based bidding.
Pan had said that the central bank would also optimize its temporary overnight repo and reverse repo operations by narrowing the interest-rate corridor to 50 basis points from 70 basis points.
Analysts had widely expected the central bank to conduct overnight reverse repo operations at the end of the month, a period when liquidity conditions typically tighten.
