The People's Bank of China, the country's central bank, on Thursday said that it will conduct 1.2 trillion yuan (about 179 billion U.S. dollars) of outright reverse repo operations to maintain ample liquidity in the banking system.
The operation will be carried out with a fixed quantity through interest-rate bidding, with winning bids determined at multiple price levels and featuring a maturity period of three months, or 89 days.
Introduced in October 2024, the outright reverse repo is the central bank's monthly tool for managing liquidity in the national banking system, with a tenor of no more than one year.
In the process, the central bank buys bonds from primary dealers, such as large commercial banks, on the agreement that the dealers will buy back the same amount of the same type of bonds in the future, thereby injecting liquidity into the market.
The instrument has enriched the country's monetary policy toolkit, complementing previous measures such as temporary repos, temporary reverse repos, and the buying and selling of treasury bonds.
China's central bank to conduct 1.2 trln yuan of outright reverse repo operation
China launched the first batch of its 2026 special treasury bonds on Thursday to bolster the core capital and risk resilience of eight key state financial enterprises.
The move is expected to further strengthen the institutions' operational capacity, resilience to risks and ability to serve the real economy, providing stronger support for the country's steady and sound economic growth, according to a circular issued by the ministry.
The eight institutions include the Industrial and Commercial Bank of China, the Agricultural Bank of China, two policy financial institutions, and four state-owned commercial insurers.
The first phase, worth 150 billion yuan (around 22.37 billion U.S. dollars), is a five-year fixed-rate interest-bearing bond. Its coupon rate will be determined through competitive bidding. Interest begins accruing on Friday, with annual payments.
On September 7, the Ministry of Finance announced that it plans to issue 300 billion yuan (around 44.75 billion U.S. dollars) in special treasury bonds this year to support eight central financial enterprises in replenishing their core Tier 1 capital.
The 150 billion yuan tranche is the first installment of the 300 billion yuan plan. A seven-year tranche is scheduled for bidding on November 18, with details to be announced before issuance.
This marks the second round of such capital injections, following a 500 billion yuan (around 74.58 billion U.S. dollars) issuance in 2025 that supported four major state-owned banks
China issues first batch of 2026 special treasury bonds
