(Yicai Global) Feb. 15 -- China's central bank the People's Bank of China has omitted open market operations this entire week, in effect thereby withdrawing over CNY1 trillion (USD148 billion) of liquidity from the nation's interbank market.
 

PBOC accomplished this feat by allowing previous reverse repos or medium-term lending facility loans mature without new open market injections. It let CNY90 billion (USD13.3 billion) of reverse repos ripen today without new intervention, reiterating that liquidity in the banking system is ample.
 

In all, the bank sat by as CNY608 billion of the previous reverse repos as well as CNY383.5 billion worth of MLF loans to fall due this week.
 

MLF loans are one of the several tools the central bank wields to manage monetary policy and lending. They provide financial institutions with funds as authorities intensify their efforts to support lending to select economic sectors, rather than just topping up liquidity in the overall financial system.
 

Despite five straight days of central bank inaction, most benchmark market interest rates lay low today.
 

The overnight Shanghai Interbank Offered Rate continue to fall 0.80 basis points to 1.7130 percent as the rate for three-month loans also dropped 2.80 basis points to 2.8020, while the one-week term rate alone swam against the day's current, rising 2.10 basis points to 2.3510 percent,
 

PBOC injected funds into the market last month via cuts in commercial banks' required deposit-reserve ratios and MLF loan grants, as well as reverse repo operations, to decant an abundance of cash to satisfy strong pre-holiday demand.

Editor: Ben Armour