An employee counts the Chinese currency at a credit union in Tancheng County of Linyi City, east China’s Shandong Province [Xinhua]
An employee counts the Chinese currency at a credit union in Tancheng County of Linyi City, east China’s Shandong Province [Xinhua]

China’s central bank on Wednesday pumped more money into the market to ease a liquidity strain and aid the slowing economy.

The People’s Bank of China (PBOC) conducted 80 billion yuan ($12.3 billion) in seven-day reverse repurchase agreements (repo), a process in which central banks purchase securities from banks with an agreement to resell them in the future.

The reverse repo was priced to yield 2.25 per cent, unchanged from Tuesday’s injection of 70 billion yuan, according to a PBOC statement.

The move followed a net injection of 20 billion yuan into the financial system on Monday.

In Wednesday’s interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, stayed flat at 1.999 per cent.

The central bank will make pledged supplementary loans to the country’s major policy lenders on a monthly basis to match their lending for targeted sectors, starting in May.