BEIJING, Oct. 23 -- China's central bank conducted 808 billion yuan (about 112.55 billion U.S. dollars) of seven-day reverse repos at an interest rate of 1.8 percent Monday.

The move aims to hedge against the potential squeeze on liquidity in the banking system from the tax busy season and government bond issuance, so as to keep liquidity reasonable and ample, the People's Bank of China said in a statement.

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.