China's central bank has injected funds into the financial system, which is alleviated fears of a repeat of the liquidity crisis that has gripped the market in June.

Bank of China has pumped 13 billion yuan in the market through open market operations. China's central bank has used open market operations as the main tool for adjusting the money supply in the interbank market.

The bank raised the rate for the seven-day bonds from 3.9% to 4.1%. This suggests a move in line with monetary conditions and data that showed an increase in capital inflows and inflation.

Today's injection led to concerns that China might tighten monetary policy to curb inflation. Excess liquidity spurred inflation and house prices in September. Investors believe that they are less chances of a credit crunch in November.