The People's Bank of China, China's central bank, conducted 20 billion yuan worth of 7-day revere repos at annualized yield of 2.25 percent in Thursday's open market operation.
Given that 80 billion yuan worth of reverse repos are due this week, together with the 10 billion yuan of 7-day reverse repos offered on Tuesday, the central bank withdrew a net 50 billion yuan out of the financial system.
Traders noted that despite investors' rising demand for cash at the year-end, the liquidity condition in the financial system still remained loose on the whole.
The central bank was expected to cut reserve requirement ratio (RRR) in the future, as the November consumer price index (CPI) and producer price index (PPI) continued to be sluggish, noted Guotai Junan Securities.
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