BEIJING, May 10 (Xinhua) -- China's central bank drained 20 billion yuan (3.1 billion U.S. dollars) from the financial system through open market operations Thursday, with the volume of maturing securities exceeding new injections.
The People's Bank of China (PBOC) pumped 30 billion yuan through reverse repos, with 50 billion yuan of contracts maturing, leading to a net withdrawal of 20 billion yuan.
A reverse repo is a process by which the central bank bids and buys securities from commercial banks, with an agreement to sell them back in the future.
The interest rate for the 20-billion-yuan seven-day reverse repos was 2.55 percent, and the rate for the 10-billion-yuan 14-day reverse repos was 2.70 percent. Both rates were unchanged from the previous operations.
The PBOC has recently managed market liquidity through targeted moves rather than across-the-board adjustments of interest rates.
The central bank plans to keep monetary policy prudent and neutral, maintain a stable, reasonable level of liquidity, and oversee moderate growth of financial credit and social financing.
