China central bank pumps 662.5 billion yuan through 7-day reverse repos at 1.40%: statement

The People’s Bank of China (PBOC) injected 662.5 billion yuan through 7-day reverse repurchase agreements at an interest rate of 1.40 percent, according to a recent statement. This move follows a period of liquidity management that saw the central bank conduct zero reverse repo operations in early June, marking the first such pause since August 2024. The current reverse repo rate has remained unchanged since May 2025, reflecting a broader trend of accommodative monetary policy.

The PBOC has been actively adjusting its short-term liquidity tools to maintain stability in the financial system. Recent measures include narrowing the interest rate corridor for overnight repo and reverse repo facilities and increasing overnight reverse repo operations. These steps signal a potential shift toward using the overnight policy rate as a primary benchmark, rather than the 7-day reverse repo rate.

Analysts project the 7-day reverse repo rate to decline to 1.30 percent by the end of the quarter, with a longer-term expectation of 1.50 percent in 2027. The PBOC’s recent liquidity injections suggest managing seasonal demand and supporting economic momentum amid broader structural reforms and international financial integration efforts.