China central bank skips open market operations for 3rd consecutive work

China's central bank suspended open market operations for the third working day Tuesday, citing sufficient liquidity in the banking system.

Liquidity was at a "relatively high level" after increased fiscal spending at the end of the year offset the effect of matured reverse repos, the People's Bank of China (PBOC) said in a statement.

Fiscal expenditure sees fiscal deposits flowing into commercial banks from the central bank, thus improving market liquidity.

A reverse repo is a process by which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

The PBOC said earlier that it would conduct open market operations in a flexible way to meet the seasonal liquidity needs of banks near year-end.

(ASIA PACIFIC DAILY)