China central bank cuts14-day reverse repo rate by 5bps

China central bank cuts14-day reverse repo rate by 5bps

Headquarters of the PBOC, the central bank, is pictured in Beijing. (Reuters photo)

China's central bank on Wednesday lowered the interest rate on 14-day reverse repurchase agreements by five basis points, following a similar reduction in the short-term liquidity tool last month.

The People's Bank of China (PBOC) said on its website that it was lowering the 14-day reverse repo rate to 2.65% from 2.70%, while keeping the 7-day rate unchanged at 2.50%.

The PBOC unexpectedly trimmed the seven-day lending rate in November for the first time in more than four years, a signal to markets that policymakers are ready to act to prop up slowing growth.

On Wednesday, the PBOC injected a total of 200 billion yuan ($28.41 billion) into money markets through reverse bond repurchase agreements.

($1 = 7.0389 Chinese yuan) 

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