Liquidity pumped in via MLF

Source: Xinhua | 2018-08-16

The People’s Bank of China yesterday injected 383 billion yuan (US$55.5 billion) into the market via the medium-term lending facility to maintain liquidity.

The funds will mature in one year with an interest rate of 3.3 percent, unchanged from previous operations. The MLF injection came as 336.5 billion yuan of such loans matured yesterday.

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.

Yesterday, the PBOC suspended reverse repo operations for the 19th consecutive trading day.

China will keep a prudent and neutral monetary policy in 2018.