(Yicai Global) Sept. 5 -- China's central bank, the People's Bank of China (PBOC), has withdrawn CNY70 billion (USD10.7 billion) from the financial system via maturing reverse repos on Tuesday.

PBOC halted all reverse repo for the fourth straight trading day, but previous reverse repos of CNY70 billion matured today.

The liquidity in the interbank market is adequate to absorb the effects of reverse repos maturing, PBOC said, therefore, halting open market operations today.

Reverse repo is a process by which the central bank purchases securities from commercial banks through bidding with an agreement to sell them back in the future. The central bank has increasingly relied on open market operations for liquidity management, rather than cuts in interest rates or reserve requirement ratios.

In the interbank market today, short-term interest rate declined further, while the medium-term rate climbed. It signals that the interbank market has adequate liquidity today despite the central bank withdrew funds from the market for four trading days in a row.

The overnight "Shanghai Interbank Offered Rate" (SHIBOR) is down 8.5 basis points to 2.6650 percent. The one-week term rate decreased 3.70 basis points to 2.8202 percent. The Shibor for three-month loans climbed 1.50 basis points to 4.4173 percent.