PBOC Net Injects CNY 200 Billion via 3-Month Buyout Reverse Repos

China’s central bank said it would conduct CNY 1 trillion of 3-month buyout reverse repo operations on July 6, with CNY 800 billion of the same tenor maturing in July, resulting in a net injection of CNY 200 billion, according to Jiemian News. The move marked an end to a tightening phase since March in which such operations had been reduced on a net basis. Dongfang Jincheng said the shift to net injections came as market rates had risen after the central bank moderately scaled back various open-market operations, reducing the need to keep shrinking 3-month buyout reverse repos. Industrial Securities said DR001 and DR007 had risen to around the open-market operation rate, suggesting liquidity may have moved from surplus to balance. Brokerages broadly forecast China’s 10-year government bond yield to trade in a 1.70%–1.75% range in the near term. GF Securities set targets of 1.70% for the 10-year and 2.15% for the 30-year, while CICC Construction Investment cited a 1.70%–1.75% trading band for the 10-year.