Chinese Central Bank drains 220 Billion Yuan from market

China's central bank, the People's Bank of China (PBOC), has drained 220 billion yuan ($33.85 billion) from the market this week to ensure stable money supply, following a drain of 290 billion yuan from the financial system last week, Chinese news agency Xinhua reported.

    PBOC conducted 360 billion yuan in seven-day reverse repurchase agreements (repo) this week, a process in which central banks purchase securities from banks with an agreement to resell them in the future.

    With 580 billion yuan's worth of repos maturing this week, the PBOC ended up draining a net 220 billion yuan from money markets.

    On Friday's interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, was down by 0.1 basis points to 2 percent.

    The Shibor for seven-day loans fell 0.3 basis points to 2.326 percent. The Shibor for three-month loans dropped 0.2 basis points to 2.894 percent.