BEIJING, May 10 (Xinhua) -- China's central bank drained 20 billion yuan ($3.1 billion) from the financial system through open market operations Thursday, with the volume of maturing securities exceeding new injections.

Photo: Xinhua

The People's Bank of China (PBC) pumped 30 billion yuan through reverse repos, with 50 billion yuan of contracts maturing, leading to a net withdrawal of 20 billion yuan.

A reverse repo is a process by which the central bank bids and buys securities from commercial banks, with an agreement to sell them back in the future.

The interest rate for the 20-billion-yuan seven-day reverse repos was 2.55 percent, and the rate for the 10-billion-yuan 14-day reverse repos was 2.70 percent. Both rates were unchanged from the previous operations.

The PBC has recently managed market liquidity through targeted moves rather than across-the-board adjustments of interest rates.

The central bank plans to keep monetary policy prudent and neutral, maintain a stable, reasonable level of liquidity, and oversee moderate growth of financial credit and social financing.