China's central bank on Monday pumped 25 billion yuan about (3.8 billion US dollars) into the market to preserve liquidity. The People's Bank of China (PBOC) put 45 billion yuan into seven-day reverse repos, a process by which central banks purchase securities from banks with an agreement to sell them back in the future, according to China's (Xinhua) News Agency.
The reverse repo was priced to yield 2.25%, according to a PBOC statement. Reverse repos worth 20 billion yuan mature on Monday, so the central bank has effectively injected 25 billion yuan into the market. On Monday's interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor) was up by 0.3 basis point to 2.005%.
The Shibor for seven-day loans also increased 0.3 basis point to 2.327%. The Shibor for three-month loans rose 0.4 basis point to 2.9075%