China’s central bank mopped up a net 653.89 billion yuan (US$79 billion) from the banking system in the first five months of this year in open-market operations, approaching the full-2004 level, as it tries to head off economic overheating.

The central bank has made open-market operations an increasingly important tool to absorb yuan liquidity as a result of efforts to keep the currency stable and curb credit.

The central bank conducts open-market operations with banks, insurers, brokerages and rural credit cooperatives on China’s national interbank market in Shanghai.

“The interest rates on the central bank bills have been falling continuously since the start of 2005,” the People’s Bank of China said, a trend it said reflected ample liquidity on the money markets.

The bank had drained 1.198 trillion yuan from the banking system through issuing bills and 90 billion yuan by entering repurchase agreements, the central bank said. Matured repurchase agreements in the January-to-May period allowed the bank to take 36.9 billion yuan from the banking system.

The central bank released 671 billion yuan into the banking system through various channels, including matured bills worth 544.2 billion yuan and matured reverse repurchase agreements of 90 billion yuan, according to the central bank. The figures were earlier reported by the Economic Daily.

　　［辅助阅读］2005年前五个月，中国人民银行在其上市业务中共获得6538.9亿元的净收益。