BEIJING, June 4 (Xinhua) -- The market liquidity is expected to remain stable in June as China's central bank is well prepared with targeted measures to tide over the month known for mid-year liquidity tension.
The People's Bank of China Monday conducted 80 billion yuan (11.59 billion U.S. dollars) in seven-day reverse repos, which was just enough to offset the same amount maturing Monday.
The move is the latest signal that China's central bank will strive to keep the monetary system balanced in June against several possible market disturbances this month.
A total of 530 billion yuan in reserve repos are maturing this week, while medium-term lending facility worth 463 billion yuan will be due on Thursday. Liquidity pressure might grow further as June will see a maturing peak of interbank negotiable certificates of deposit as well as an acceleration in the issuance of special local government bonds.
"We have conducted a comprehensive evaluation of and are fully prepared for all factors influencing June's market liquidity," the central bank said in a statement Sunday.
The central bank will conduct open market reverse repos and MLF in a flexible manner based on market capital demand and supply conditions, the statement said.
About 100 billion yuan might be injected into the market as the central bank's targeted cuts for the reserve requirement ratio for county-level rural commercial banks took effect on June 17.
Ming Ming, deputy director with the research institute with CITIC Securities, expects that the central bank will extend the term of some due MLF and conduct more reverse repos to counter market liquidity disturbances.
The PBOC will continue to maintain macro liquidity at a reasonably ample level, pay close attention to the liquidity situation of small and medium-sized banks, and comprehensively use various monetary policy tools to maintain stable operation of the money market, the statement said.