The People's Bank of China (the central bank) injected liquidity into the banking system today, Monday, through the medium-term lending facility and reverse repurchase agreements.

The bank injected 129 billion yuan (about 18.1 million dollars) through a 7-day reverse repurchase agreement at an interest rate of 1.8%.

The bank also injected 100 billion yuan for a one-year term through the medium-term lending facility at an interest rate of 2.5%.

The medium-term lending facility helps commercial banks and specialized banks maintain a level of liquidity by borrowing from the central bank using the securities they have as collateral, while reverse repurchase agreements, known as "reverse repos," involve the central bank buying securities from commercial banks through bidding, with an agreement to sell them back in the future.

The central bank states that these measures aim to maintain a reasonable and ample level of liquidity in the banking system, according to Xinhua News Agency.

It is worth noting that the People's Bank of China began using the medium-term lending facility in 2014 to assist commercial and developmental banks in maintaining levels of liquidity by allowing them to borrow from the central bank using securities as collateral.

In the foreign exchange market, the Chinese yuan recorded a slight rise against the dollar in today's trading. The reference rate set by the People's Bank of China was 7.1313 yuan per dollar, an increase of 2 pips from its level on Friday at the end of last week, which was 7.1315 yuan.

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

It is noted that the reference rate for the yuan against the dollar is determined based on the buying prices provided by major financial institutions before the start of interbank market trading each day.