UPDATE 1-China c.bank confirms first use of new tool to boost short-term liquidity
(Adds proof of c.bank interference in forex rates with latest dollar purchase data)
Nov 29 (Reuters) - China's central bank revealed on Friday that it injected funds into the market in late October via two short-term liquidity operations, the first time it made public that it had conducted such operations.
The People's Bank of China (PBOC) injected a combined 59 billion yuan ($9.67 billion) into the money markets via the two-day short-term operations known as SLOs, according to a table published on its website.
China's central bank foreign exchange purchase data raised eyebrows when released on Friday, as it increased almost 70 percent month-on-month to 449.5 billion yuan ($73.78 billion), the highest level since January 2008.
The data provides numerical proof of central bank interference to suppress the yuan's value, contradicting its pledges to reduce currency intervention.
In January, the PBOC announced the creation of SLOs and said it would announce any such operations one month after they took place. Since then, rumours of the central bank conducting them have spread from time to time, including during an acute market cash squeeze in June.
Central bank officials were not immediately available for comments.
As part of a crackdown on risky lending by banks, the PBOC engineered a cash crunch in late June, and some money market rates skyrocketed to 30 percent from a normal range of about 3-4 percent.
This triggered turmoil in financial markets globally and generated some criticism of the PBOC for failing to communicate its intentions.
The central bank has since increased transparency, including publishing data on a recently-launched liquidity management tool, the Short-term Lending Facility modeled after the U.S. Federal Reserve discount window.
($1 = 6.0925 Chinese yuan) (Reporting by Lu Jianxin, Kazunori Takada and Heng Xie; Editing by Richard Borsuk)