SHANGHAI, Sept 23 Reuters China39;s central bank supplied 14day cash to its banking system for the first time in months on Monday and at a lower interest rate, signalling its intent to further ease monetary conditions.

The People39;s Bank of China PBOC injected 234.6 billion yuan 33.29 billion into the banking system through open market operations, saying it wanted to keep quarterend liquidity adequate at a reasonable level in the banking system.

The PBOC added 160.1 billion yuan via 7day reverse repos at 1.70, it said in a statement. It also injected 74.5 billion yuan via 14day reverse repos at 1.85, compared with 1.95 during the previous injection.

Analysts said the funding operation in itself wasn39;t a major policy easing. China has typically used 14day repos to help the banking system tide over long holidays, and the last time it did so was ahead of a spring break in February.

Monday39;s injection comes ahead of China39;s National Day holidays starting Oct.1, and the cut in rates aligns the 14day repo rate with the shorter 7day repo rate which was cut in July.

I wouldn39;t take this rate cut as a signal that PBOC loosened monetary policy further, said Zhang Zhiwei, chief economist at Pinpoint Asset Management.

Nonetheless, I do expect PBOC will cut 7day repo rate as well as the reserve requirement ratio in the coming months. There is a press conference tomorrow when the financial regulators will shed light on their policy stance.

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