The People's Bank of China (PBOC), the central bank, scaled back its efforts to pump liquidity into money market this week, as funds continued to pour into China betting on the appreciation of its currency.

With the sales of 6 billion yuan (923 million U.S. dollars) of three-month bills to commercial banks on Thursday, PBOC completed its open market operations this week, realizing a net injection of 26 billion yuan of liquidity into the banking system after offsetting bills and repurchase agreements worth 117 billion yuan that had matured.

It was PBOC's third straight week of net injection, but this week's 26 billion yuan was sharply down from nearly 300 billion yuan last week due to the strong demand for cash during the May Day holiday.

Despite three consecutive weeks of net liquidity injections, analysts said the PBOC's tight monetary policy would not change in the medium term and the current macro control policy will continue as liquidity remains ample in the market.

"New loans may jump to 750 billion yuan in April, while the amount of bills and repurchase agreements that mature in May and June will both exceed 500 billion yuan, respectively, all these factors continue to weigh on PBOC to keep its policy tight," said Tang Jianwei, a macroeconomic analyst with the Bank of Communications.

The inflow of funds from overseas has also increased the market's liquidity, according to different figures by Chinese government departments.

China reported a trade deficit of 700 million U.S. dollars in the first quarter and received 30.34 billion U.S. dollars of foreign direct investment (FDI) in January-March.

However, China's foreign exchange reserves, which are made up by its current account surpluses, FDI and funds flowing in the country, rose by nearly 200 billion U.S. dollars in the first quarter.

"This indicates that a large amount of short-term international capital is flowing into China, thus adding to the pressure of the already excessive liquidity domestically," said Zhang Ming, a deputy research fellow with World Economy Institute of the Chinese Academy of Social Sciences.

PBOC statistics show the funds outstanding for foreign exchange totaled 400 billion yuan in March, boosted by a strengthening Chinese currency.

The Chinese currency, or the yuan, rose by more than 0.8 percent in April against the U.S. dollar, and the central parity touched a historic high of 6.499 per U.S. dollar on April 30.