(Yicai Global) March 1 -- China's central bank skipped open market operations for the second day in a row today, effectively siphoning CNY40 billion (USD6 billion) from the monetary system as reverse repos mature.

Liquidity in the banking system is at a relatively high level, ample enough to offset the maturing reverse repos and payments due for government bond subscription pledges, the People's Bank of China said in a statement explaining the decision.

Despite the withdrawal, most of the benchmark overnight rates moved down today to reflect the high liquidity levels. The overnight Shanghai Interbank Offered Rate fell seven basis points to 2.5840 percent. The one-week term rate was down 9.2 bips at 2.6580 percent, and the three-month loan rate dropped 0.5 basis points to 2.7510.

The PBOC withdrew CNY1 trillion (USD149 billion) from the market in the first working week after the week-long Chinese New Year holiday, and followed it up with a net injection of CNY60 billion the following week. It pumped a further CNY200 billion into the banking system over the first three days of this week before skipping OMOs yesterday, when no reverse repos were due to expire.