China injected a record 860 billion yuan ($138 billion) into the financial system using reverse repurchase agreements this week to meet rising demand for cash before a week-long Spring Festival holiday.

The People's Bank of China injected 410 billion yuan using 14-day reverse repos on Thursday, after adding 450 billion yuan on Tuesday. The overnight money-market rate climbed for an eighth day, the longest run of increases in almost a year.

"The PBOC injection is in reaction to liquidity needs," said Frances Cheung, a strategist at Credit Agricole CIB in Hong Kong. "It is natural for cash demand to pick up before the Chinese New Year."