China Unveils Repo Facility to Manage Offshore Yuan Liquidity
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China’s central bank has launched a repurchase facility to supply yuan liquidity to foreign monetary authorities, international financial organizations and sovereign wealth funds, stepping up efforts to boost the currency’s global appeal.
People’s Bank of China (PBOC) Governor Pan Gongsheng announced the tool Wednesday at the Lujiazui Forum in Shanghai.
The facility offers maturities of up to three months against high-grade collateral, including Chinese sovereign and policy bank bonds. Rates will be determined by adding a spread to the PBOC’s seven-day reverse-repo rate, linking the offshore tool to the domestic policy rate.
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