China's central bank said on Monday that it started using outright reverse repos, a tool of open market operations, to maintain a reasonable abundance of liquidity in the banking system and further enrich its monetary policy toolbox.

The People's Bank of China will conduct so-called outright reverse repurchase agreements with primary dealers in open market operations monthly for a timeframe of no more than a year, according to a statement Monday.
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.

The securities will include sovereign bonds, local government bonds, financial debentures and corporate bonds, the PBOC said.
The central bank began to conduct 241.6 billion yuan (about 33.88 billion U.S. dollars) of seven-day reverse repos at an interest rate of 1.5 percent Monday.