The central bank issued an announcement on June 5th, stating that it will conduct a 1 trillion yuan outright reverse repo operation on June 6th, with a term of three months (91 days). This move is aimed at maintaining sufficient liquidity in the banking system and alleviating market concerns about liquidity.

On June 5th, the People’s Bank of China’s “Operation of Various Central Bank Tools” column also disclosed for the first time the liquidity injection situation of various tools. Overall, the total net injection in May was 1,119.6 billion yuan.

Looking back at previous operations, in May, the central bank conducted 700 billion yuan of outright reverse repos, including 400 billion yuan with a three-month term and 300 billion yuan with a six-month term. In May, a total of 900 billion yuan of three-month reverse repos matured, resulting in a net withdrawal of 200 billion yuan for the entire month. The large-scale injection in June not only broke the central bank’s usual practice of announcing operations at the end of the month, but also sent out a strong signal of “protecting liquidity”.