PBOC Schedules 1.2 Trillion Yuan Outright Reverse Repo for October 8

The People's Bank of China announced on September 30 that it will conduct a 1.2 trillion yuan ($170 billion) three-month outright reverse repo operation on October 8. With 1 trillion yuan in three-month contracts maturing during the month, the operation represents an expanded rollover, providing a net injection of 200 billion yuan into the banking system. The pre-announced tender follows a series of recent liquidity maneuvers designed to smooth quarter-end friction and accommodate a seasonal pickup in sovereign debt issuance and state-directed investment tools.

By announcing the massive three-month liquidity injection ahead of the holiday break, the central bank is signaling clear support for interbank stability entering the fourth quarter. The net addition of 200 billion yuan helps absorb substantial upcoming local and central government bond supply while preserving commercial bank capacity to extend policy-driven lending.

The People's Bank of China (PBOC) announced on September 30 that it will conduct a 1.2 trillion yuan ($170 billion) outright reverse repo operation on October 8 to maintain ample liquidity in the banking system, according to official notices carried by state media. The operation will feature a fixed volume, interest-rate bidding, and a multiple-price tender mechanism. It carries an 89-day term, setting the maturity date for January 5, 2027. With approximately 1 trillion yuan in three-month outright reverse repo contracts scheduled to mature during October, the forthcoming operation will result in an expanded rollover that injects 200 billion yuan in net cash into interbank channels. The net expansion marks a shift from September, when the central bank rolled over two tenors of outright reverse repos in equal amounts. Market observers noted that the move reflects a decisive tilt toward supporting economic growth as fiscal authorities accelerate bond sales. Wang Qing, chief macroeconomic analyst at Golden Credit Rating, told Securities Times that macro policy is leaning more heavily into stabilization efforts. He highlighted the stepped-up pace of sovereign bond issuance and the rollout of 800 billion yuan in new policy-oriented financial instruments as initiatives that require robust central bank liquidity support. Wang anticipated that medium-term liquidity facilities, including the Medium-term Lending Facility (MLF) and outright reverse repos, may continue to see expanded rollovers in the near term to back bank lending. The move aligns with guidance from the PBOC Monetary Policy Committee's third-quarter regular meeting, which affirmed that the central bank would deploy and adjust multiple tools to preserve ample liquidity. Over recent years, the central bank has refined its policy framework toward price-based interest rate regulation, utilizing open market operational volume primarily to anchor market rates. Interbank borrowing costs have trended downward in late September. Benchmark overnight (DR001) and seven-day (DR007) interbank repo rates hovered below the PBOC's policy rate benchmark of 1.4 percent. To balance liquidity demand, the PBOC also rolled out temporary overnight reverse repos spanning late September to October 8 and executed a 300 billion yuan 14-day reverse repo operation on September 28.