Business / Markets

Central bank drains money from market

(Xinhua) Updated: 2016-04-08 13:43

BEIJING - China's central bank drained money from the market as a liquidity strain eased this week.

The People's Bank of China conducted 120 billion yuan ($18.55 billion) of seven-day reverse repurchase agreements (repo) from Monday to Friday, a process in which central banks purchase securities from banks with an agreement to resell them in the future.

The reverse repos were all priced to yield 2.25 percent.

The central bank ended up draining a net 275 billion yuan from money markets this week, as 395 billion yuan's worth of reverse repos matured.

This follows a net injection of 15 billion yuan into the financial system last week.

The drain showed that the country's capital strain eased after weeks of injections, analysts said.

On Friday's interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, rose to 1.98 percent.

The Shibor for seven-day loans fell 0.2 basis point to 2.287 percent. The Shibor for three-month loans dropped 0.15 basis point to 2.8455 percent.

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