A bank employee prepares bank notes at an Industrial and Commercial Bank of China Ltd cash center in Wuxi, Jiangsu province. [Photo provided to China Daily]

BEIJING - China's central bank has injected funds into the market through reverse repurchase agreement (repo) to meet cash demand.

The People's Bank of China (PBOC), the central bank, pumped 20 billion yuan ($3.28 billion) into the money market on Tuesday through a seven-day reverse repo, a process in which the central bank purchases securities from banks with an agreement to resell them at future dates.

The seven-day reverse repo was priced to yield 3.45 percent, according to a statement on the PBOC website.

The benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one other, shrank 12.10 basis points to 2.766 percent on Tuesday's interbank market.