China Central Bank to Conduct 700 Billion Yuan Outright Reverse Repo

What changed

China’s central bank will conduct a 700 billion yuan outright reverse repo operation on October 15, with the funds due over six months, or 182 days. The People’s Bank of China announced the move on October 14, using fixed-quantity operations, rate bidding and multiple-price allocation.

In the transaction, the central bank buys bonds from primary dealers, including large commercial banks, and agrees to sell back the same quantity and type of bonds later.

Why it matters

This is a large, time-bound injection of liquidity into China’s banking system. Banks receive cash against bonds while retaining a defined route to reverse the transaction six months later. The stated aim is to keep liquidity ample, giving the system a clearer funding horizon than a very short-term operation would.

The six-month maturity is the detail to watch. It gives banks funding that reaches into April 2027, but it also means the eventual return of that liquidity will become part of the central bank’s future calendar. How much cash is ultimately added will depend on the operation’s final allotment and on other tools or maturing operations around it.