In this undated file photo, pedestrians pass the headquarters of the People's Bank of China in Beijing. (PHOTO KUANG DA / CHINA DAILY)

BEIJING - China's central bank on Friday conducted 10 billion yuan (about $1.58 billion) of reverse repos to maintain liquidity in the banking system.

The interest rate for the 7-day reverse repos was set at 2.1 percent, according to the People's Bank of China.

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With 300 billion yuan of reverse repos maturing on the same day, this led to a net liquidity withdrawal of 290 billion yuan from the market.

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.