China Financial Daily:Shrinkage of Banking Balance Sheet

PBOC sold Rmb110bn of 7-day reverse repo at flat yield of 2.45% andRmb30bn of 14-day reverse repos at 2.60% yield on Wednesday. The injectionsaw a net Rmb10bn liquidity pumped into the market on Wednesday, offset byRmb130bn in maturing reverse repos. Overall, 7-D reverse repos play anincreasingly important role in OMO since this year. 7-D reverse repos accountsfor nearly 80% of total reverse repos conducted by PBOC in the first half ofMay, up from that of 35% in February and 57% in April.