SHANGHAI, Oct 31 Reuters China39;s central bank has injected 500 billion yuan 70.24 billion into its banking system during October through a new reverse repurchase tool announced earlier this week, the bank said on Thursday.

The People39;s Bank of China PBOC said the repo operations aimed to keep banking system liquidity reasonably ample. The tenor of the repos for the month was six months.

The new tool, announced on Monday, which supports credit flow in the banking system ahead of the expiration of trillions of yuan in loans at the end of the year, also offers the regulator additional sources of bonds that it can sell in the future.

While the central bank39;s current holdings of government bonds are sufficient for existing operations, it needs to establish additional channels for bond holdings. This will lay the groundwork for future bond sales and swap facility operations, analysts at China Securities said in a note.

Unlike pledged repos that the PBOC typically uses in regulator reverse repo operations, the title of the collateral in an outright repo transaction is sold to the buyer. That means the PBOC will have more flexibility to meet liquidity needs by selling the bonds it holds.

Separately, the central bank said it had purchased a net 200 billion yuan of government bonds in open market operations in October, according to official statements. The bank did not specify whether it bought or sold shortterm or longdated bonds as it did in August.

Until late…