Beijing, June 6 (IANS) China’s central bank on Monday pumped 40 billion yuan ($6 billion) into the market to ease a liquidity strain.
The People’s Bank of China (PBOC) pumped the huge sum in a seven-day reverse repurchase agreements (repo), a process in which central banks purchase securities from banks with an agreement to resell them in the future, Xinhua news agency reported.
The reverse repo was priced to yield 2.25 per cent, unchanged from Friday’s injection of 40 billion yuan, according to a PBOC statement.
The move followed a net injection of 70 billion yuan and 95 billion yuan into the financial system on last week.
In Monday’s interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, dropped by 0.1 basis point to 1.998 per cent after the injection.