(Yicai Global) April 17 -- China's central bank, the People’s Bank of China, withdrew a net CNY200 billion (USD28.25 billion) in liquidity by foregoing an open market operation as this amount of its medium-term lending facility matured today.

The liquidity level in the banking system is ample right now, the regulator said in a statement explaining its inaction.

The PBOC conducted an open market operation of CNY100 billion for a one-year MLF to inject liquidity into the system on April 15, at the same time cutting its interest rate to 2.95 percent, 20 bips lower than the MLF operation rate on Feb. 17 when the bank pared the rate for the first time this year.

The bank also released CNY200 billion of liquidity into the system on April 15 by cutting the reserve requirement ratio by 0.5 of a percentage point to support small and medium financial institutions. It plans to trim another 0.5 of a percentage point on May 15.

The PBOC will implement a prudent monetary policy more flexibly and focus more on facilitating the recovery of the real economy, the central bank said, adding it will stress targeted regulation, pay attention to internal and external balances and maintain rational and abundant fluidity, as well as keeping the growth of currency-related credit and social financing on a par with economic development.

Editor: Ben Armour