(Yicai Global) Dec. 28 -- China's central bank today added the most funds to the money market for any single day in the past five months to support liquidity.

The People's Bank of China injected a net CNY220 billion (USD32.1 billion) through reverse repurchase agreements on the last trading day of the year. Through reverse repos, the PBOC buys securities from commercial banks through bidding with an agreement to sell them back in the future.

The PBOC carried out CNY150 billion worth of seven-day reverse repos at the same 2.55 percent interest rate as yesterday. It also conducted CNY100 billion worth of 14-day reverse repos at 2.7 percent. Some CNY30 billion of earlier seven-day reverse repos matured today.

Chinese lenders usually ring in the New Year by tightening liquidity since companies take out capital to pay for taxes and other expenses at the end of each year. The PBOC often steps in with more funds before the Chinese New Year, or Spring Festival, which will be celebrated in early February next year. 

Market easing is expected to resume early next month and the central bank is likely to cut reserve requirement ratios, trading information site East Money reported, citing experts.

Money rates at Shanghai banks were mixed amid the PBOC's latest open market operations. The overnight Shanghai Interbank Offered Rate, or Shibor, fell 32.30 basis points to 1.4700 percent, the lowest since Oct. 30. The seven-day Shibor was up 2.2 points at 2.7210 percent, the highest since Sept. 30. The three-month rate climbed 1.8 points to 3.3570 percent, a peak since July.

Editor: Emmi Laine