Cen­tral bank lends $62.13b via MLF; rates un­changed

Global Times - - Bizupdate -

China’s cen­tral bank said on Tues­day it had in­jected 393 bil­lion yuan ($62.13 bil­lion) into the fi­nan­cial sys­tem via one-year medium-term lend­ing fa­cil­ity (MLF) loans.

In­ter­est rates for the MLF loans were un­changed at 3.25 per­cent, the Peo­ple’s Bank of China (PBC) said in a state­ment on its web­site.

Au­thor­i­ties are keen to keep am­ple liq­uid­ity in the fi­nan­cial sys­tem and avoid the risk of a spike in lend­ing rates as de­mand for cash surges ahead of the week­long lu­nar new year hol­i­days, when spend­ing on gifts and cel­e­bra­tions rises.

The PBC said it had made the lat­est MLF in­jec­tion to step up “fine­tun­ing” as liq­uid­ity on the first trad­ing day af­ter the hol­i­days would be af­fected by sev­eral fac­tors, in­clud­ing tax pay­ments, ma­tur­ing MLF loans, and the ma­tur­ing of some con­tin­gent re­serve al­lowance (CRA) and re­serve pay­ments at fi­nan­cial in­sti­tu­tions.

A batch of 243.5 bil­lion yuan of 12-month MLF loans is due to ma­ture on Thurs­day.

The PBC said in De­cem­ber it would al­low some com­mer­cial banks to tem­po­rar­ily keep less re­quired re­serves to help them cope with the heavy de­mand for cash ahead of the fes­tiv­i­ties. And the CRA would re­lease tem­po­rary liq­uid­ity worth al­most 2 tril­lion yuan.

In the state­ment, the cen­tral bank said it had skipped re­verse re­pos for the 15th straight trad­ing day.

The out­stand­ing bal­ance of re­verse re­pos in open mar­ket op­er­a­tions has fallen to 70 bil­lion yuan as of Tues­day, ac­cord­ing to Reuters cal­cu­la­tions based on of­fi­cial data.

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