(Yicai Global) Sept.6 -- China's central bank, the People's Bank of China (PBOC), has withdrawn CNY120 billion (USD18.3 billion) from the financial system via open market operations on Wednesday.

PBOC resumed 7-day and 28-day reverse repos today after halting them over the past four trading days. It conducted a CNY20 billion 7-day and a CNY20 billion 28-day reverse repo, with 2.45 percent and 2.75 percent interest rates, respectively.

The previous reverse repos of CNY160 billion also matured today, bringing the PBOC's open market liquidity withdrawal tally today to CNY120 billion.

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 central bank increasingly relies on open market operations for liquidity management, rather than cuts in interest rates or reserve requirement ratios.

In the interbank market today, short-term interest rate declined further, while the medium-term rate climbed. It signals that the interbank market still has adequate liquidity today. The overnight "Shanghai Interbank Offered Rate" (SHIBOR) is down 2.4 basis points to 2.6410 percent. The one-week term rate decreased 1.10 basis points to 2.8092 percent. The Shibor for three-month loans climbed 0.98 basis points to 4.4271 percent.