PBoC injects CNY 700 billion via MLF to support economy

On October 25th, the People’s Bank of China (PBoC) injected CNY 700 billion into financial institutions through a one-year medium-term lending facility (MLF) at a steady rate of 2.0%.

PBoC injects CNY 700 billion via MLF to support economy

This was in contrast to the CNY 789 billion MLF loans maturing this month, resulting in a net cash withdrawal of CNY 89 billion. This action follows a historic 30 basis point reduction in the MLF rate in September, as the central bank intensified efforts to stimulate the faltering economy with significant support measures since the pandemic began.

PBoC revamps policy framework, shifts focus to seven-day reverse repo rate

The PBoC has been revamping its policy framework in recent weeks to better align with global standards. It has started using the seven-day reverse repo rate as its primary policy tool and shifted the MLF operation date from the 15th to the 25th of each month. Additionally, the PBoC injected CNY 292.6 billion through the reverse repo operation while maintaining the rate at 1.5%, compared to CNY 108.4 billion of seven-day reverse repos due the same day.