By Ding Qi (chinadaily.com.cn)
Updated: 2007-08-17 17:47

The People's Bank of China issued 101 billion yuan (US$13 billion) worth of central bank notes to a handful of financial institutions today in an effort to absorb excess liquidity from commercial banks.

The 3-year notes carry an annual interest rate of 3.69 percent, 0.02 percent lower than returns on the batch of notes issued on Thursday.

The notes were sold to four major State-owned commercial banks, share-holding banks and municipal commercial banks, according to sources.

China Construction Bank, the Industrial and Commercial Bank of China, Bank of China and the Agricultural Bank of China bought 30 billion yuan, 27 billion yuan, 17 billion yuan, and 12 billion yuan respectively. Other banks such as China Minsheng Banking Corp and Shanghai Pudong Development Bank also took in billions worth of the new notes, sources said.

Analysts said that due to recent poor sales of ordinary notes in open market operations, the central bank had to issue them to particular institutions to absorb excessive liquidity and prevent the economy from overheating.