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China central bank to sell 70 bln yuan of 3-month bills

China's central bank announced Wednesday a sale of 70 billion yuan (about 10 billion U.S. dollars) of three-month bills on Thursday.

The move was aimed at maintaining a steady growth in the country's monetary base and keeping interest rates stable, said the People's Bank of China in a statement.

Since the beginning of 2009, the central bank has increased the frequency of its three-month bill sales. In February, it sold three-month bills once every week. Thursday's sale will be the biggest one since May 2008.

A Guosen Securities report said the amount of liquidity in the market is abundant and commercial banks need more channels for short-term investment. Three-month bill sales helped broaden the channels.

Analysts said the central bank might continue to drain funds from the market as new yuan-denominated loans reached about 2. 5 trillion yuan in the first two months, but it will leave it on track to conduct a small net injection into the market in March as several previous sales will be due this month.