China central bank says huge cash injections to stabilise market expectations, restore confidence

A man wearing a mask walks past the headquarters of the People's Bank of China, the central bank, in Beijing, China, as the country is hit by an outbreak of the new coronavirus, February 3, 2020. REUTERS/Jason Lee

SHANGHAI (Reuters) - China’s central bank said on Tuesday that its huge liquidity injections through open market operations this week showed its determination to stabilise financial market expectations and restore market confidence.

The remarks were published on the official WeChat account of the People’s Bank of China (PBOC) after it injected a total of 1.7 trillion yuan ($242.74 billion) via reverse repos on Monday and Tuesday.

China’s equity and commodities markets plunged on Monday on fears about a spreading virus outbreak, wiping out $393 billion in stock market capitalization, but were not as volatile on Tuesday.

The central bank said the larger-than-expected liquidity injection should push money market and bond yields down, and reduce financing costs and ease financial pressure on small, micro businesses.

$1 = 7.0034 Chinese yuan renminbi