Central Bank moves to keep liquidity stable in China
BEIJING - China’s central bank yesterday announced lending worth RMB360 billion (USD 53 billion) via the medium-term lending facility to keep liquidity stable. The loans will mature in one year with an interest rate of 3.2%, according to the People’s Bank of China.
The MLF was first introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank by using securities as collateral.
The State newsagency Xinhua reported that the central bank suspended operations via reverse repos yesterday, after pumping RMB70 billion into the banking system through reverse repos the previous day.
It was the first net injection since June 19, Xnihua said, sending a clear signal on maintaining stable liquidity and dispelling concerns about monetary tightening. www.webershandwick,cn (ATI).