(Yicai Global) Aug. 31 -- China's central bank, the People's Bank of China (PBOC), has withdrawn CNY40 billion (USD6 billion) from the financial system via open market operations on Thursday.

PBOC halted all reverse repos today, but previous reverse repos of CNY40 billion matured. It comes only the day after PBOC drained CNY100 billion from the market yesterday.

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

In the interbank market today, short-, medium- and long-term interest rates were cut down.  It signals that the interbank market has adequate liquidity today despite the central bank withdrew funds from the market for two consecutive days.

The overnight "Shanghai Interbank Offered Rate" (SHIBOR), is down 9.27 basis points to 2.8310 percent. The one-week term rate decreased 3.87 basis points to 2.8879 percent. The Shibor for one-month loans fell 1.35 basis points to 3.8920 percent.