BEIJING - China's central bank on Wednesday conducted 20 billion yuan ($3.11 billion) of reverse repos to keep liquidity stable in the banking system ahead of the Spring Festival holiday.

The interest rate for the seven-day reverse repos was set at 2.2 percent, according to a statement on the website of the People's Bank of China.

With 100 billion yuan of reverse repos maturing on the same day, the move led to a net liquidity withdrawal of 80 billion yuan from the market.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

China's central bank has pledged to make its prudent monetary policy more targeted and flexible to adapt better to the needs of high-quality development and put more focus on the efficiency of financial services to support the real economy.