China's central bank on Tuesday allowed 20 billion yuan (3 billion U.S. dollars) to drain from the market to ensure a stable money supply.
The People's Bank of China (PBOC) put 50 billion yuan into seven-day reverse repos, a process by which central banks purchase securities from banks with an agreement to sell them back in the future.
The reverse repo was priced to yield 2.25 percent, according to a PBOC statement. Reverse repos worth 70 billion yuan mature on Tuesday, so the central bank has effectively drained 20 billion yuan from the market.
On Tuesday's interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor) was up by 0.6 basis point to 2.011 percent. The Shibor for seven-day loans also increased 0.4 basis point to 2.331 percent. The Shibor for three-month loans rose 0.83 basis point to 2.9158percent.
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