(Yicai Global) Oct. 23 -- The People's Bank of China injected another CNY20 billion (USD3 billion) cash into the financial system by conducting an open market operation today.

The purpose of this action is to keep the liquidity of its financial system "reasonably ample," the regulator reiterated in a statement.

The central bank carried out a CNY70 billion seven-day reverse repo today against a maturing CNY50 billion from its previous operation, effectively sluicing CNY20 billion of fresh funds into the system.

The regulator resumed its daily open market operation since October 14 after a long holiday hiatus earlier this month, and has net infused CNY220 billion of cash into its financial system this week.

A reverse repo is a procedure in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future. In this way, commercial banks can raise short-term capital. It is the equivalent of a short-term loan with the securities.

Editor: Ben Armour