The People's Bank of China (PBOC), the central bank, auctioned 12 billion yuan (US$1.77 billion) of three-month bills in its regular open market operations Thursday at a yield of 1.5704 percent.

The three-month bill yield has been steady at 1.5704 percent since early June.

The central bank also conducted 91-day repurchase agreement operations on Thursday at a yield of 1.57 percent, taking 30 billion yuan (US$4.43 billion) out of the money market.

The PBOC absorbed 2 billion yuan (US$295 million) from the money stock this week. This came after the central bank's issuance of 60 billion yuan (US$8.56 billion) of bills and repurchase agreements to offset those worth 58 billion yuan (US$8.85 billion) that matured this week.

It was third straight week the PBOC has siphoned money from the market but the volume was down sharply from 84 billion yuan (US$12.4 billion) last week and 81 billion yuan (US$12 billion) the week before that.

A trader of a commercial bank in Shanghai said the money market remained quite loose. The repurchase agreements' weak interest rate indicated lenders had enough liquidity to buy those relatively low-yield assets from the central bank.

(Xinhua News Agency August 5, 2010)