The bank conducted Central pIt has opened medium-term lending facilities worth 900 billion yuan (about 125.14 billion US dollars) to maintain reasonable and sufficient liquidity in the banking system.
The maturity of this operation for medium-term lending facilities is one year at an interest rate of 2 percent, unchanged from the rate of the previous operation conducted last month. After the operation, the outstanding balance of medium-term lending facilities reached 6.239 trillion yuan.
In recent months, Chinese authorities have reformulated the bank’s reverse repo rate Chinese people seven-day rate as the key interest rate while allowing the short-term process to play a greater role in liquidity management, a practice more in line with that adopted by Western central banks.
The People’s Bank of China conducted seven-day reverse repo operations, worth 249.3 billion yuan (about 34.66 billion dollars), at an interest rate of 1.5 percent.
This step aims to maintain liquidity in the banking system at the end of the month at a reasonable level, according to what the central bank said in a statement.
Reverse repo operations are operations in which the central bank buys securities from commercial banks through submitting bids, with an agreement to resell them again in the future.
And pulling helps Liquidity The Medium-Term Lending Facility (MLF) will help facilitate this shift in monetary policy, economists say. The central bank is likely to continue its accommodative policies to support demand for credit and stimulate financial markets.
Economist Hunter Chan said in his comment that Standard Chartered continues to call for reducing the mandatory reserve ratio for lenders by 25 basis points to meet the demand for liquidity.
The People’s Bank of China may also increase the volume of direct reverse repo operations and net purchases of Treasury bonds, Chan said.
