A view of the PBC building in Beijing Photo: VCG

The People's Bank of China (PBC) announced on Monday that it will lower the interest rate for 14-day reverse repos from 1.95 percent to 1.85 percent. This cut, the first since February, is expected to help stabilize market liquidity ahead of the upcoming National Day holidays, analysts said.

The PBC also injected 160.1 billion yuan ($22.69 billion) into the market via seven-day reverse repos at 1.70 percent. It injected 74.5 billion yuan via 14-day reverse repos, according to a statement on the PBC's website.

"With the National Day holidays approaching, financial institutions are experiencing heightened demand for 14-day liquidity. In light of this, the PBC is proactively and flexibly nurturing short-term liquidity. It is a normal funding operation," Zhou Maohua, an economist with China Everbright Bank, told the Global Times on Monday.

Since the start of this year, the PBC has reduced interest rates across several policy tools in order to cut financing costs and strengthen the country's economic recovery, analysts noted.

On July 22, the central bank lowered the interest rate on seven-day reverse repos from 1.8 percent to 1.7 percent. On the same day, both one-year and over-five-year loan prime rates fell by 10 basis points, the Xinhua News Agency reported.

PBC governor Pan Gongsheng said on Monday that the central bank will continue to maintain a supportive monetary policy stance, intensify the strength of monetary policy adjustments, and enhance the precision of monetary policy regulation to create a favorable monetary and financial environment for stable economic growth and high-quality development in China.