BEIJING - China's central bank on Thursday continued to pump cash into the banking system via reverse repos to maintain liquidity.
The People's Bank of China injected 80 billion yuan ($11.3 billion) into the market through seven-day reverse repos at an interest rate of 2.2 percent, according to a statement on the website of the central bank.
The move is intended to offset the impacts of government bond issuance and keep liquidity in the banking system at a reasonably sufficient level, the central bank said.
As 70 billion yuan of reverse repos matured Thursday, the operation led to a net injection of 10 billion yuan into 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.
China will pursue a prudent monetary policy in a more flexible and appropriate way, according to this year's government work report.
The country will use a variety of tools including reserve requirement ratio cuts, interest rate reductions and re-lending to enable M2 money supply and aggregate financing to grow at notably higher rates than last year, said the report.
