China injects 600 billion yuan into financial system, keeps rate unchanged for 16th month

People’s Bank of China (PBOC) left the interest rate on 600 billion yuan (US$92.6 billion) worth of one-year medium-term lending facility (MLF) unchanged

The central bank said the loan operation was meant to ‘fully meet financial institutions’ liquidity demand’ while keeping the fund conditions ‘reasonably ample’

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The People’s Bank of China (PBOC) kept the rate on 600 billion yuan (US$92.6 billion) worth of one-year medium-term lending facility (MLF) loan to some financial institutions steady at 2.95 per cent from previous operations. Photo: AFP

Published: 10:49am, 16 Aug 2021Updated: 10:49am, 16 Aug 2021

China’s central bank injected billions of yuan through medium-term loans into the financial system on Monday, while keeping the interest rate unchanged for the 16th month in a row.

The People’s Bank of China (PBOC) kept the rate on 600 billion yuan (US$92.6 billion) worth of one-year medium-term lending facility (MLF) loan to some financial institutions steady at 2.95 per cent from previous operations.

The central bank said the loan operation was meant to “fully meet financial institutions’ liquidity demand” while keeping the fund conditions “reasonably ample”.

The move “took into account that financial institutions could use part of the funds freed from a reduction to reserve requirement ratio (RRR) in July to pay back MLF loans due this month”, the PBOC added.

In the same online statement, the central bank said Monday’s operation was a rollover of 700 billion yuan of maturing MLF loans due on Tuesday.