China's yuan fixing estimated at 7.1783, survey shows.

China's yuan fixing estimated at 7.1783, survey shows.

In a move aimed at maintaining liquidity in the banking system, China's central bank, the People's Bank of China (PBOC), injected 700 billion yuan ($97 billion) through an outright reverse repurchase tool in May. The operations, which were conducted with tenors of three and six months, come as 900 billion yuan in outright repos are set to expire this month [1].

The PBOC's actions suggest a net withdrawal of 200 billion yuan from the system via the reverse repurchase tool. This intervention follows a period of restraint in the central bank's open market operations, with the PBOC refraining from buying or selling Chinese government bonds for the fifth consecutive month in May [1].

Market participants are closely watching for signals on when the PBOC will resume purchases of its own government bonds. Analysts at Caitong Securities have expressed the urgency of resuming government bond trading to increase the central bank's holdings of sovereign debt, especially amid rising risks of U.S.-China decoupling [1].

The PBOC's latest actions highlight its efforts to manage liquidity and maintain stability in the financial system. As the global economic landscape continues to evolve, particularly with concerns surrounding the potential end to the U.S.-China tariff truce, investors and financial professionals will be closely monitoring the central bank's future policy moves.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L2N3S209L:0-china-s-central-bank-injects-700-bln-yuan-of-outright-reverse-repos-in-may/