PBOC Injects 3.57 Trillion Yuan on May 25, Signals Return to Balanced Liquidity Stance

According to Shanghai Securities News, on May 25, the People's Bank of China conducted 258 billion yuan in 7-day reverse repo operations, bringing net daily liquidity injection to 357 billion yuan. However, money market rates remained under pressure, with the DR007 rate rising to 1.4038% early in the session.

Market participants noted that multiple factors including tax payments, month-end funding needs, and maturing Medium-term Lending Facility (MLF) operations contributed to near-term volatility. The PBOC's consistent liquidity support stance suggests markets are unlikely to face significant tightening, with conditions expected to stabilize from prior excessive easing into a balanced, slightly loose equilibrium.