(Yicai Global) Jan. 22 -- The People's Bank of China withdrew a net CNY80 billion (USD11.8 billion) from the financial system today, sapping liquidity after a record high injection of CNY1.16 trillion (USD171 billion) last week.

The central bank did not conduct any new reverse repurchases to counter those maturing, marking the second straight day the PBOC has not made any reverse repos.

The PBOC injected nearly CNY1.3 trillion via reverse repos last week, while just CNY110 billion matured. The move aimed to spur liquidity in anticipation of the Chinese New Year, a week-long holiday for which celebrations will begin on Feb. 4 and demand for cash is likely to be high.

The monetary authority is also set to cut the reserve requirement ratio by 0.5 point on Jan. 25, the second reduction of the ratio this year. That should release a further CNY750 billion into the market, according to analysts.

Editor: James Boynton