China’s central bank will inject 50 billion yuan ($8.05 billion)into the money markets through seven-day reverse bond repurchase agreements on Tuesday, traders said.
The injection is the largest through open market operations since July 7.
On Monday, China’s benchmark CSI 300 equity index fell 8.5 percent, reversing a government-engineered recovery since in July.
Some analysts have highlighted tighter liquidity conditions in the money market as a risk for equities.
Maturing reverse repos will drain a net 70 billion yuan from the banking system this week.
The People’s Bank of China (PBOC) injected a net 30 billion yuan into the banking system last week, after a 45 billion net drain the week before. ($1 = 6.2091 Chinese yuan)