Business

Central bank continues net cash injection in money market

CHINA'S central bank made a net cash injection via open market operations for the second consecutive day Friday in an effort to ease a cash strain.

The People's Bank of China conducted 150 billion yuan (US$21.93 billion) of reverse repos, a process by which the central bank purchases securities from banks through bidding with an agreement to sell them back in the future.

The injection saw a net 80 billion yuan pumped into the market Friday, offset by 70 billion yuan in maturing reverse repos.

The operations included seven-day reverse repo priced to yield 2.35 percent, 14-day contracts with a yield of 2.5 percent, and 28-day agreements with a yield of 2.65 percent, according to a central bank statement.

In Friday's interbank market, the overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, climbed 2.7 basis points to 2.36 percent, the highest level since Jan. 26. Shibor for one-month loans rose 1.36 basis points to 4.0652 percent, a more than one-and-a-half year high.

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