China's central bank drained liquidity from the financial system Tuesday following the largest weekly cash injection in 11 months.
The People's Bank of China (PBOC) conducted 30 billion yuan (about 4.35 billion U.S. dollars) of seven-day reverse repos at an interest rate of 2.55 percent and 20 billion yuan of 14-day reverse repos at 2.7 percent, according to a PBOC statement.
The PBOC said the operation was aimed at easing the impact on liquidity from the government bond issuance and banks moving to meet the requirement of reserved deposits.
As reverse repos worth 140 billion yuan matured on Tuesday, the PBOC effectively withdrew 90 billion yuan of funds from financial institutions.
Through reverse repos, the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
Last week saw a combined net injection of 600 billion yuan via the PBOC's open market operations, the largest since the beginning of the year.
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