China's central bank continued to ease liquidity strain for the financial system on Thursday, injecting 400 billion yuan (60.8 billion U.S. dollars) of funds through reverse repurchase (repo) operations.
The People's Bank of China (PBOC) conducted a seven-day reverse repo worth 110 billion yuan and a 28-day reverse repo worth 290 billion yuan on Thursday, with yields priced at 2.25 percent and 2.6 percent respectively.
In a reverse repo, the central bank buys securities from banks with an agreement to resell them in the future.
The move followed reverse repo operations worth 155 billion yuan on Tuesday. The PBOC also conducted short-term liquidity operations on Monday and Wednesday, pumping 205 billion yuan into the money market.
The central bank said earlier this week it would inject more than 600 billion yuan through such tools as standing lending facility, medium-term lending facility and pledged supplementary lending, aimed at easing the liquidity squeeze expected before the upcoming Spring Festival holiday week, which begins on the Lunar New Year's eve on Feb. 7.
On Thursday's interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one other, climbed by 3.1 basis points to 2.014 percent.
