China Central Bank Surprises by Injecting 200 Billion Yuan Via MLF Loans, Rate Unchanged

中国央行一年期MLF操作
Published on: November 14, 2019
Author: Caroline Kong

China’s central bank unexpectedly extended loans through its medium-term lending facility (MLF) on Friday, while keeping the lending rate unchanged from the previous operation.

The People’s Bank of China (PBOC) said on its website the interest rate on one-year MLF loans<cnmlf1yrrp=pboc> remained at 3.25%.</cnmlf1yrrp=pboc>

The PBOC also said it has injected 200 billion yuan ($28.60 billion) into financial institutions via the liquidity tool.

The central bank usually conducts MLF operations when there is a maturity coming due, but there are no such loans or reverse repos maturing on Friday.

Last week, the central bank cut the interest rate on MLF loans for the first time since February 2016, but only by a marginal 5 basis points. It also injected 400 billion yuan ($56.92 billion) into financial institutions via the liquidity tool.

Source: Reuters

 

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