China's central bank continues to add liquidity via reverse repos

China's central bank

China's central bank injected funds into the financial system through open market operations Monday, reported state news agency Xinhua.

The People's Bank of China said on its website that it has conducted 18 billion yuan (US$2.62 billion) of seven-day reverse repos at an interest rate of 2 percent.

The move is aimed at keeping liquidity reasonable and ample in the banking system, according to the central bank.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.