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PBOC will 'moderately' increase cash in system

The People's Bank of China said it will moderately increase short-term liquidity in the banking system through issuing reverse repos to stabilize market expectations, according to a statement on its official micro blog. The PBOC resumed open market operations on Thursday, issuing 35 billion yuan ($5.64 billion) in reverse bond purchase agreements, which inject cash for short periods of time. The move comes as demand for cash has begun to drive up short-term rates, because companies are building up capital in preparation for the first-half reporting period.