The People’s Bank of China (PBoC) injected a total of CNY 700 billion into financial institutions via a one-year medium-term lending facility (MLF) on October 25th at an unchanged rate of 2.0%.
PBoC maintains 1-year MLF rate after record trim
That compared with a total of CNY 789 billion of MLF loans due this month, marking a net cash withdrawal of CNY 89 billion. The decision followed a record reduction of 30bps in MLF rate in September, as the central bank ramped up efforts to revive the weakening economy by delivering massive support measures since the pandemic. In recent weeks, the PBoC has started overhauling its policy framework, aiming to align more closely with global standards.
Reverse repo details
It has started to use the seven-day reverse repo rate as the main policy lever and moved the MLF operation to the 25th of each month from the 15th. The PBoC injected CNY 292.6 billion through the reverse repo operation and retained its rate at 1.5%. That compared with a total of CNY 108.4 billion of the seven-day reverse repo due the same day.
