(Yicai Global) Sept. 10 -- The People's Bank of China net injected another CNY20 billion (USD2.92 billion) into the financial system by conducting open market operations to counter the expiration of previous ones.

The bank carried out CNY140 billion in 7-day reverse repos today against a maturing CNY120 billion of the previous operation, effectively adding CNY20 billion of fresh funds into the system. It has net injected a total CNY240 billion of cash into the system thus far this week in similar operations. The regulator net pulled out CNY470 billion in liquidity last week.

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

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. 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