(Bloomberg) — China’s central bank used open-market operations to inject the largest amount of cash into the banking system since May, as upcoming corporate tax payments tighten liquidity conditions.The People’s Bank of China on Tuesday net injected 250 billion yuan ($35 billion) via seven-day reverse repurchase agreements, according to a statement. There were no facilities coming due Tuesday, and the central bank kept the rate steady at 2.55%. China’s 10-year bond yield was little changed at 3.22%.The central bank is acting to fine-tune interbank liquidity conditions while it keeps broader monetary-policy settings stable, seeking to keep credit growth appropriate while avoiding rapid debt build-up as the economy slows. The move comes before an Oct. 24 deadline for companies to pay tax, which typically increases the demand for cash and tightens liquidity.The PBOC injected a net 490 billion yuan in the four days through Oct. 25 last year, and acted last week to funnel 200 billion yuan in one-year funds into the system.“Part of the timing is that we’re in the tax season, but a big part is that China wants to make sure there’s ample liquidity in the system,” said Gerry Alfonso, executive director of the international business department at Shenwan Hongyuan Group Co. “There are a lot of ups and downs, they want to calm the market, and they want to do it in a delicate way.”Government bonds tumbled and a gauge measuring traders’ bets on liquidity tightness jumped to the highest level since May on Monday. Investors turned cautious after local banks unexpectedly kept the base rate for corporate loans unchanged. A local report saying China may limit sales of bond funds also damped sentiment.China’s policy makers are preparing for two key meetings in the coming weeks with fresh evidence that economic growth will slow below 6%. PBOC Governor Yi Gang responded to last week’s gross domestic product data not by hinting at much greater stimulus in the pipeline, but by reminding investors that China’s focus remains on keeping its heavy debt load under control.“The PBOC wants a monetary policy that is not too tight or too loose,” said Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong. The slowing economy limits the room for the officials to tighten policy, while the rise in inflation means they can’t ease too much, he said.“But later this quarter, the PBOC will take a looser stance to aid the economy and the LPR will continue to fall,” Hu said. “The yield on government bonds will have room to drop.”\–With assistance from Claire Che and Helen Sun.To contact the reporters on this story: Elena Popina in Hong Kong at [email protected];Tian Chen in Hong Kong at [email protected] contact the editors responsible for this story: Richard Frost at [email protected], Sofia Horta e Costa, Jeffrey BlackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.