July 3, 2020 / 1:28 AM / a month ago

China central bank makes biggest weekly cash drain via OMO since February

FILE PHOTO: Headquarters of the People's Bank of China (PBOC), the central bank, is pictured in Beijing, China September 28, 2018. REUTERS/Jason Lee

SHANGHAI (Reuters) - China’s central bank skipped open market operations on Friday, making the biggest weekly net fund drain in 4-1/2 months.

The People’s Bank of China (PBOC) said Friday’s move was due to “relatively high banking system liquidity level to absorb factors including maturing reverse repos and government bond issuance”, according to a statement on its website.

A batch of 110 billion yuan worth of reverse repos are due to mature on Friday.

For the week, the PBOC drained a net 490 billion yuan ($69.35 billion), the biggest weekly net drain since the week ending on Feb. 21, compared with an injection of 480 billion yuan on a net basis a week earlier.

Reporting by Winni Zhou and Andrew Galbraith; Editing by Christian Schmollinger

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