Chinese central bank pumps more money into market

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Beijing, May 27 (IANS) China’s central bank on Friday pumped more money into the market to ease a liquidity strain.

The People’s Bank of China (PBOC) conducted 95 billion yuan (14 billion) in 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 percent, unchanged from Thursday’s injection of 75 billion yuan and Wednesday’s 70 billion yuan, according to a PBOC statement.

The move followed a net injection of 65 billion yuan on Tuesday and 65 billion yuan on Monday into the financial system.

In Friday’s interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, stayed flat at 2 percent.

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