The People's Bank of China conducted 565.5 billion yuan in overnight reverse repurchase operations on August 17, according to its public market trading announcement released the same day. This came as the central bank reported zero seven-day reverse repo operations, responding to the demand from primary dealers in the open market.

Wind data shows that 349 billion yuan in overnight reverse repos and 18 billion yuan in seven-day reverse repos matured on August 17, totaling 367 billion yuan in expiring reverse repos. As a result, the central bank achieved a net injection of 198.5 billion yuan into the public market on that day.

Notably, this marks the fifth consecutive trading day that the People's Bank of China has maintained zero seven-day reverse repo operations. Despite the absence of seven-day operations, the central bank had announced on August 12 its intention to conduct overnight reverse repo operations on August 14 and from August 17 to August 19, employing fixed interest rates and quantity tenders, with each day's operation capped at 600 billion yuan.

Looking at the operations carried out so far, the overnight reverse repo scales on August 14 and August 17 were 349 billion yuan and 565.5 billion yuan, respectively.

Wang Qing, chief macro analyst at Golden Credit Rating, said that the zero seven-day reverse repo operations in recent trading days, combined with the overnight reverse repo operations in mid-August, indicate that the People's Bank of China is exercising more precise control over market interest rates. This suggests that market rates will operate more smoothly in the future, and it also implies that overnight reverse repos may gradually replace seven-day reverse repos as the core policy tool for short-term liquidity adjustment.

Tan Yiming, chief fixed income analyst at Tiansheng Securities, believes that the flexible use of overnight reverse repo operations can effectively smooth out fluctuations during special periods. He noted that the central bank's overall stance on liquidity protection remains unchanged, with August seeing excess renewal of three-month outright reverse repos and equal renewal of six-month outright reverse repos. Combined with overnight reverse repo operations, market interest rates are expected to maintain stable operations.

In its second-quarter monetary policy implementation report for 2026, the People's Bank of China explicitly stated its commitment to closely monitoring monetary policy changes in major overseas central banks, continuously strengthening analysis and monitoring of banking system liquidity supply and demand as well as money market changes. The central bank plans to comprehensively utilize and timely adjust monetary policy tools to maintain ample liquidity and better guide short-end money market rates to operate smoothly around the policy rate.

Since August, the People's Bank of China has strengthened precise liquidity management by zeroing out seven-day reverse repo operations, proactively increasing overnight reverse repos in mid-month, and boosting outright reverse repo supply based on market supply and demand conditions, said Wen Bin, chief economist at Minsheng Bank. He expects the central bank to continue comprehensively utilizing various open market operation tools in the future, combining short, medium, and long-term approaches for refined management and control, maintaining ample liquidity, and creating a suitable monetary and financial environment for stronger fiscal issuance, steady credit expansion, and stable economic growth, while smoothing interest rate fluctuations and ensuring stable financial market operations.