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What does the central bank mean by repurchase and reverse repurchase?
Hello, the repurchase transaction is one of the main transactions of China People's Bank's open market bond trading. Repurchase transactions are divided into positive repurchase and reverse repurchase.

Repurchase refers to the trading behavior that the central bank sells securities to primary dealers and agrees to buy back securities on a specific date in the future. That is, the central bank sells securities to commercial banks and other financial institutions, and then the central bank buys them back from commercial banks and other financial institutions at maturity. Repurchase is the operation of the central bank to recover liquidity from the market, and when repurchase expires, it is the operation of the central bank to put liquidity into the market.

Reverse repurchase refers to the trading behavior that the central bank buys securities from a primary dealer and agrees to sell the securities to the primary dealer on a specific date in the future. That is, the central bank buys back securities from commercial banks and other financial institutions, and then the commercial banks and other financial institutions buy back securities from the central bank at maturity. Reverse repurchase is the operation of the central bank to put liquidity into the market, and the expiration of reverse repurchase is the operation of the central bank to recover liquidity from the market.