China's central bank said on Monday that it started using outright reverse repos, a tool of open market operations, to maintain a reasonable abundance of liquidity in the banking system and further enrich its monetary policy toolbox.
The People's Bank of China will conduct so-called outright reverse repurchase agreements with primary dealers in open market operations monthly for a timeframe of no more than a year, according to a statement Monday.
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.
The securities will include sovereign bonds, local government bonds, financial debentures and corporate bonds, the PBOC said.
The central bank began to conduct 241.6 billion yuan (about 33.88 billion U.S. dollars) of seven-day reverse repos at an interest rate of 1.5 percent Monday.
China's central bank starts using outright reverse repos
Mutual trust between the European Union and China will be undermined if the European side conducts separate price commitment talks with certain Chinese firms while engaging in general negotiations with China concerning electric vehicles (EVs), a spokesperson with China's Commerce Ministry said Monday. The EU's insistence on separate talks with the relevant Chinese firms will also disrupt the overall negotiation process and add more administrative costs to follow-up implementation and supervision of price commitment agreements, the spokesperson stated.
Chinese Commerce Minister Wang Wentao and European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis held a round of talks via video link on Friday.
The European Commission said in its news release that the negotiations between the EU side and the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) do not exclude discussions with individual Chinese car exporters.
China made it clear in the talks that the CCCME had been fully authorized by different types of Chinese enterprises to put forward a price commitment plan that represents the overall position of the industry, the spokesperson said.
On this basis, China and the EU have conducted several rounds of consultations with a lot of efforts made and some progress achieved, the spokesperson said.
With the next phase of talks already launched, China hopes that the two sides will build on previous consultations and accelerate the negotiation process, so as to secure substantive breakthroughs as soon as possible, the spokesperson added.
The European Commission, the executive arm of the 27-nation EU, is set to impose countervailing duties of up to 35.3 percent on EVs imported from China, additional to the EU's existing 10 percent tariff on imported cars, following a qualified majority vote on Oct 4.
EU's separate EV price commitment talks with Chinese firms will harm mutual trust: official
