"Rising fiscal expenditure near the end of the year keeps the banking system liquidity at a high level," the PBOC said on its website.
With 30 billion yuan (about 4.3 billion U.S. dollars) of reverse repos maturing Thursday, that led to a net withdrawal of 30 billion yuan from the market.
A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
The country will continue to implement a proactive fiscal policy and prudent monetary policy, according to the annual Central Economic Work Conference held earlier this month.
The quality and effect of the fiscal policy must be enhanced with more efforts on structural adjustment, while the monetary policy should be pursued with moderate flexibility to maintain market liquidity at a reasonably ample level, said the statement released after the conference.
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