SHANGHAI: The Chinese central bank unexpectedly drained 26 billion yuan ($3.8 billion) from the money market via bond repurchase agreements yesterday, indicating the government's determination to rein in market liquidity.

The People's Bank of China (PBOC) mopped up 16 billion yuan via 28-day repos and another 10 billion yuan through 91-day repos in its open market operations, it said.

The market had expected that the PBOC would not conduct repo business this week as it might want to ensure sufficient liquidity in the market ahead of the New Year's Day holiday, typically a period of heavy spending by Chinese.