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Central bank drains money from market

Xinhua, July 7, 2016 Adjust font size:

China's central bank has drained 615 billion yuan (92 billion U.S. dollars) from the market so far this week.

From Monday through Thursday, The People's Bank of China (PBOC) conducted 175 billion yuan in seven-day reverse repos, a process by which central banks purchase securities from banks with an agreement to sell them back in the future.

The reverse repos were all priced to yield 2.25 percent, according to statements on the PBOC's website.

Reverse repos worth 790 billion yuan matured from Monday through Thursday, so the central bank has effectively withdrawn 615 billion yuan from the market.

The central bank's move shows that liquidity strain in the country's money market has eased. On Thursday's interbank market, the benchmark overnight Shanghai Interbank Offered Rate, known as Shibor, fell 0.2 basis point to 1.997 percent. Endi