China's central bank drains liquidity from market

BEIJING - China's central bank on Monday conducted 20 billion yuan ($3.06 billion) of reverse repos to maintain stable liquidity in the banking system.

The interest rate for the seven-day reverse repos was set at 2.2 percent, according to a statement on the website of the People's Bank of China.

Meanwhile, 160 billion yuan of reverse repos matured on the same day, resulting in a net liquidity withdrawal of 140 billion yuan from the market.

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 pursues a prudent monetary policy in a more flexible and appropriate way, according to this year's government work report.