(Yicai Global) June 29 -- The People's Bank of China withdrew a net CNY40 billion (USD5.65 billion) from financial system via open market operations today, after the central bank injected a total of CNY480 billion into the system last week.

A previous reverse repo of CNY40 billion matured today, while the PBOC conducted no new ones against it. The central bank conducted a total of CNY600 billion reverse repos last week, against CNY120 billion of those matured.

The PBOC is to engage in a central bank bill swap of CNY5 billion today, to support the issuance of perpetual bonds by commercial banks, according its statement. The three-month CBS are open to primary dealers at a fixed 0.25 percent rate.

Reverse repo agreements are primary tools financial institutions and banks use to provide temporary lending facilities to fund ongoing operations, where a buyer undertakes to temporarily buy a basket of securities for a fixed period and to sell them back at a slightly higher price.

Editor: Ben Armour