The People's Bank of China, the country's central bank, on Thursday issued three-year and one-year central bank bills worth up to 29 billion yuan (US$3.97 billion) at a yield of 4.56 percent and 3.41 percent respectively.

The three-year bills were valued at nine billion yuan and the one-year bills 20 billion yuan.

Primary dealers, such as commercial banks, securities firms, insurance companies and other financial institutions approved by the central bank, purchased the bills.

A record 1.27 trillion yuan (US$173.97 billion) of central bank bills, which had been issued to commercial banks to curb lending, will mature in the first quarter, according to government figures.

The central bank announced last Wednesday that it would raise the bank reserve requirement ratio by half a percentage point to 15 percent on January 25, the first raise this year following ten such moves last year as China sought to ease excess liquidity.

Experts said that despite the requirement ratio being at a 24-year high, the central bank still had room to raise it further.

The country's foreign exchange reserve reached US$1.53 trillion at the end of 2007, up 43.3 percent from a year earlier. The record reserve may add to the liquidity problem as it pumps more cash into circulation.