While the coronavirus has been taken over almost all news related to China, today the Chinese Central Bank injected $174 Billion dollars into the markets.

This liquidity was in the form of a reverse repo operation.

What is a reverse repo operation?

In a reverse repo transaction, the opposite occurs: the Desk sells securities to a counterparty subject to an agreement to repurchase the securities at a later date at a higher repurchase price. Reverse repo transactions temporarily reduce the quantity of reserve balances in the banking system.
_{- Federal Bank of New York}

China Markets

China recently re-opened their markets which have been closed in January 23rd due to the Lunar New Year. The Chinese markets were delayed due to an extension of the Lunar New Year. The China Security Regulation Commission made the decision to extend the Lunar New Year saying the outbreak will only have a short term effect on the markets.

*"We believe that the successive introduction and implementation of policy measures will play a better role in improving market expectations and preventing irrational behaviour," *
_{- China Security Regulation Commission}

Many are concerned on the outbreak's long term effects of the Chinese markets and further actions may be taken to maintain stability.

Posted via Steemleo