The People's Bank (Central) of China announced today, Tuesday, the injection of a small amount of cash liquidity into the banking system amounting to two trillion yuan (281.7 million dollars) into the banking system through a 7-day reverse repurchase mechanism at an interest rate of 1.8%.

The central bank said in a statement that this step aims to enhance the level of liquidity in the banking system, according to the China News Agency (Xinhua).

It is noted that reverse repurchase, "reverse repo," are operations in which the central bank buys securities from commercial banks by submitting bids, with an agreement to sell them back to them in the future.

In the foreign exchange market, the Chinese yuan's price recorded a slight increase against the US dollar today. The value of the yuan increased by 9 pips to register 7.938 yuan per dollar, compared to 7.0947 yuan yesterday.

Chinese rules allow the yuan to rise or fall by 2% from the central bank's reference price each trading day in the spot foreign exchange market.

It is noted that the yuan's reference price against the dollar is determined based on the purchase prices offered by major financial institutions before the start of the interbank market trading daily.