China central bank queries demand for two-month reverse repos: source

SHANGHAI (Reuters) – China’s central bank has sent queries to some banks to gauge market demand for two-month reverse repurchase agreements, a person with knowledge of the matter said on Thursday.

Reverse repos are the main conduit through which the People’s Bank of China manages money market liquidity and interest rates, and it generally does so via 7-day, 14-day and 28-day operations.

The source, who declined to be identified, said the PBOC was expected to inject funds via two-month reverse repos on Friday for the first time.

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