China’s central bank drains 10 bn yuan from market

Beijing, May 26 (IANS) China’s central bank on Thursday drained 10 billion yuan ($1 billion) from the market to ensure a stable money supply.

The People’s Bank of China (PBOC) put 75 billion yuan into a seven-day reverse repos, a process by which central banks purchase securities from banks with an agreement to sell them back in the future, Xinhua news agency reported.

The reverse repo was priced to yield 2.25 percent, according to a PBOC statement.

Reverse repos worth 85 billion yuan mature on Thursday, so the central bank has effectively drained 10 billion yuan from the market.

On Thursday’s interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor) stayed unchanged at 2.001 percent.

The Shibor for seven-day loans increased 0.1 basis points to 2.332 percent.

The Shibor for three-month loans also rose 0.25 basis points to 2.941 percent.

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