The People's Bank of China has announced that it will inject 1.2 trillion yuan ($228 billion) worth of liquidity into markets via reverse repo operations as the country combats the coronavirus.
The move by China’s central bank comes as the Shanghai Composite Index fell 8.7% when financial markets reopened Monday amid news that the outbreak of the deadly virus spread further. Other stock markets also fell sharply, with Taiwan's benchmark index down 2.8%.
Chinese authorities reported that the number of people infected by the virus first found in Wuhan had risen to more than 17,000 as of Sunday night. The virus has killed more than 360 people, all but one of them in China.
The measure announced by China’s central bank aims at maintaining the liquidity of the banking system and the stability of the monetary market during the period of virus control, according to a statement published on the bank's website. It also said that the total liquidity in the banking system is 900 billion yuan ($171 billion) higher than the same period in 2019.
A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
