Calm returns to China's money markets China's money markets remained calm as lenders waited to see if the central bank would inject more liquidity into the system following two weeks of turmoil in the interbank market. Traders in Shanghai said they expected the People's Bank of China to refrain from open market operations on Thursday, following its decision to inject Rmb29bn ($4.8bn) into the financial system on Tuesday. China's seven-day bond repurchase rate, the benchmark money market rate and a key gauge of short-term funding, opened at 5.32 per cent, down from Wednesday's close of 5.5 per cent. Tuesday's injection was the first time in three weeks the PBoC had intervened to reassure the market that it does not want to see a repeat of the cash crunch in June that raised serious concerns about the stability of China's financial system. The amount the PBoC injected was miniscule compared with the country's Rmb100tn banking market but was enough to calm nervous lenders that have been charging each other interest rates of more than 9 per cent for short-term loans over the last week. Following the PB0C's injection of capital on Tuesday the seven-day repo rate fell 344 basis points to 5.4 per cent, its steepest fall in more than two years, as banks stopped hoarding cash and began to lend to each other again. To some extent the latest cash crunch has been manufactured by the central bank, which had refused to pump extra liquidity into the inter-bank market for weeks. But analysts say authorities appear to have miscalculated by allowing rates to rise well above a level that indicates severe stress in the system.