China's central bank withdrew more money via open market operations for the tenth consecutive day Wednesday.
The People's Bank of China conducted 30 billion yuan (about 4.3 billion U.S. dollars) of reverse repos, a process by which the central bank purchases securities from banks through bidding with an agreement to sell them back in the future.
The move saw a net 20 billion yuan drained from the market, offset by 50 billion yuan in maturing reverse repos Wednesday.
The operations included seven-day reverse repos priced to yield 2.35 percent, 14-day contracts with a yield of 2.5 percent, and 28-day agreements with a yield of 2.65 percent.
Analysts believe this shows that China will continue to pursue a prudent and neutral monetary policy this year.
According to the government work report delivered at the annual parliamentary session, China will pursue a prudent and neutral monetary policy in 2017, with the M2 money supply to grow by around 12 percent, one percentage point lower than the 2016 target. In 2016, the M2 money supply increased by 11.3 percent, according to the report.
The government will apply a full range of monetary policy instruments, maintain basic stability in liquidity, ensure market interest rates remain at an appropriate level and improve the transmission of monetary policy.
Efforts will be made to encourage a greater flow of financial resources into the real economy, particularly in support of agriculture, rural areas and farmers, and small and micro businesses, the report said.
