A clerk counts yuan bills at a bank in Huaibei, East China's Anhui province. [Photo/IC]

China's central bank injected the most cash in almost three years in its open-market operations, helping ease a liquidity squeeze before the Lunar New Year holiday, Bloomberg reported on Thursday.

The People's Bank of China (PBOC) conducted 110 billion yuan ($16.7 billion) of seven-day reverse-repurchase agreements and 290 billion yuan of 28-day contracts, it said in a statement on its website.

That compares with 160 billion yuan of contracts that matured and resulted in a net cash injection of 315 billion yuan at this week's two auctions.

Liquidity conditions often tighten ahead of the week-long Chinese New Year holiday and the central bank usually injects large amounts of cash into the banking system to keep rates steady.

Earlier on Tuesday, the central bank also said it injected more than 600 billion yuan via the three policy tools of the standing lending facility (SLF), medium-term lending facility (MLF) and pledged supplementary lending (PSL).

With the government paying more attention to supply-side reform, analysts said the PBOC tends to use short and medium-term tools to maintain stable liquidity, which could reduce the need for it to cut banks' reserve requirement ratios (RRR) in the near future.

In an interview with the China Business News, PBOC chief economist Ma Jun said the PBOC pumping more than 600 billion yuan medium-term liquidity could be seen as a substitute for a RRR cut.

The market should pay more attention to the sentiment of short-term interest rates, especially the seven-day repurchase (repo) rate, rather than policy tools the central bank has used, Ma said.