BEIJING, July 13 (Xinhua) -- China's central bank on Monday pumped cash into the banking system via reverse repos for the first time in July to maintain liquidity.
With no reverse repos maturing Monday, the People's Bank of China injected a total of 50 billion yuan (about 7.15 billion U.S. dollars) into the market through seven-day reverse repos at an interest rate of 2.2 percent, according to a statement on the website of the central bank.
The move is intended to maintain reasonable and sufficient liquidity in the banking system, the central bank said.
A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
China will pursue a prudent monetary policy in a more flexible and appropriate way, according to this year's government work report.
The country will use a variety of tools including required reserve ratio reductions, interest rate cuts, and re-lending to enable M2 money supply and aggregate financing to grow at notably higher rates than last year, said the report.