This Sept 28, 2018 photo shows the headquarters of the People's Bank of China (PBOC), China's central bank, in Beijing. (PHOTO / VCG)

BEIJING - China's central bank drained liquidity from the banking system through open market operations on Thursday.

The People's Bank of China conducted 10 billion yuan (US$1.55 billion) of seven-day reverse repos at an interest rate of 2.2 percent, according to a statement on its website.

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With 50 billion yuan of reverse repos maturing on the same day, the move resulted in a net liquidity withdrawal of 40 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.