http://s9/mw690/62608692gx6BuRikPvW68&690Central Bank Injects Fund to Ease Fears of Money Crunch 20130731" TITLE="China's Central Bank Injects Fund to Ease Fears of Money Crunch 20130731" />

Good Evening, you're now watching CBN Money Watch, an English daily financial news program, brought to you from our Shanghai studio. I am Gloria Ai. We are here to give you the latest updates on China's financial news and economic policies.

After the close of markets on Tuesday, / China’s central bank added 17 billion yuan (US$2.8 billion) to the domestic banking system. / The hope is that the new funds will help ease rising interest rates / and prevent a repeat of last month’s crippling liquidity crunch / which may hurt Chinese commercial banks in August.

After five weeks of no activity on the open market,/on Tuesday / the Central Bank finally launched / a long-waited seven day bond repurchase operation, / pumping 17 billion yuan into China’s banking system. / Surprisingly, / the reverse interest rate being paid out / was set at 4.4 percent / – much higher than the projected 3.35 percent. / This also marks the first time since February / when the Central Bank conducted similar / repurchasing operations.

In addition to the 17 billion yuan injection, / another 85 billion yuan in central bank bills / will mature this week / bringing the Central Bank’s net total cash infusion for the week / to 102 billion yuan. / This is compared to no funds being added by the Central Bank last week.

And while the 17 billion yuan repurchase / is considered to be a small action / being taken by the Central bank to alleviate cash needs, / it has also been six months since the last bond repurchase. / The message the Central Bank seems to be sending / is that it will have a steady hand in managing cash availability / -- not creating any excessive liquidity in the market. /