PBOC issues bills to drain liquidity

China's central bank issued bills Tuesday for the second time this year, signaling an effort to control excess liquidity in the money market.

The People's Bank of China issued 27 billion ($4.39 billion) in three-month bills on Tuesday, with the yield unchanged at 2.9089 percent from Thursday's issuance of 10 billion yuan worth of three-month bills. The Thursday issuance marked the central bank's first issuance since late 2011.

The central bank also offered 28-day repurchase agreements on Tuesday to drain 52 billion yuan from the money markets.

The broad M2 money supply increased by 16.1 percent in April from the previous year, according to the central bank, beating previous market estimates, with analysts warning that the rising liquidity may have been driven by speculation.