The People's Bank of China (PBOC) recently cut interest rates of its medium-term lending facility (MLF) loans and reverse repos by 10 basis points amid efforts to lower lending cost and boost economic growth. It lowered the rate of 700 billion yuan (about $110 billion) worth of one-year MLF to financial institutions to 2.85 per cent compared with 2.95 per cent on the previous operation.The central bank also added 100 billion yuan of funds into the market via seven-day reverse repos at an interest rate of 2.1 per cent, down from 2.2 per cent.
With 500 billion yuan worth of MLF and 10 billion yuan worth of reverse repos maturing on the same day, the aforementioned moves will lead to a net liquidity injection of 290 billion yuan into the market, official Chinese media reported.
The People's Bank of China recently cut interest rates of its medium-term lending facility (MLF) loans and reverse repos by 10 basis points amid efforts to lower lending cost and boost economic growth. It lowered the rate of 700 billion yuan worth of one-year MLF to financial institutions to 2.85 per cent compared with 2.95 per cent on the previous operation#
The MLF tool was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.
Fibre2Fashion News Desk (DS)