This file photo dated Sept 28, 2018 shows the headquarters of the People's Bank of China, the central bank, in Beijing. (PHOTO / VCG)

BEIJING- China's central bank drained liquidity from the banking system on Tuesday with more reverse repos maturing than conducted.

The People's Bank of China injected 10 billion yuan (about $1.57 billion) into the market through seven-day reverse repos at an interest rate of 2.2 percent, according to a statement on its website.

With 270 billion yuan of reverse repos maturing on the same day, this led to a net liquidity withdrawal of 260 billion yuan from the market.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future. 

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