(Yicai Global) June 5 -- China's central bank the People's Bank of China continued to drain liquidity from its monetary system today.
 

The bank conducted CNY60 billion in seven-day reverse repurchases against CNY270 billion in obligations maturing from an earlier operation, which in effect sluiced CNY210 billion (USD30.4 billion) in cash out of the system.
 

The bank also siphoned CNY90 billion in liquidity out of the system yesterday.
 

Reverse repos agreements are primary tools financial institutions and banks use to provide temporary lending facilities to fund ongoing operations, where a buyer agrees to temporarily buy a basket of securities for a fixed period and to sell it back later at a somewhat higher price via the reverse repo agreement.
 

The interest rate for the open market operation was unchanged at 2.55 percent.

Editor: Ben Armour