Central bank resumes open market operations

China's central bank resumed open market operations Thursday, the first trading day after a week-long holiday, amid efforts to ease a liquidity strain.

The operations, which had been suspended for 16 trading days, will help offset factors such as payment of taxes and reserve requirement ratio, and keep liquidity in the banking system at a reasonable and stable level, the People's Bank of China said on its website.

The central bank conducted 160 billion yuan (about 25 billion U.S. dollars) of seven-day reverse repos, 130 billion yuan of 28-day reverse repos and 60 billion yuan of 63-day reverse repos, pumping a total of 350 billion yuan into the market.

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

The interest rates for seven-day, 28-day and 63-day operations were unchanged at 2.5 percent, 2.8 percent and 2.95 percent respectively.

In Thursday's interbank market, the overnight Shanghai Interbank Offered Rate, which measures the cost at which banks lend to one another, fell to 2.63 percent after the injection, while that for one-month loans dipped slightly to 4.07 percent.

The country will continue its prudent and neutral monetary policy, maintain reasonable and stable liquidity, and control the floodgates of money supply to facilitate supply-side structural reform, the central bank said last week in a monetary policy report for the fourth quarter of 2017.