ZCZC
BCN-19
CHINA-BANK-LIQUIDITY
China’s central bank injects liquidity into market
BEIJING, July 14, 2018 (BSS/Xinhua) – China’s central bank Friday injected
188.5 billion yuan (about 28.3 billion U.S. dollars) into the market via the
medium-term lending facility (MLF) to maintain liquidity.
The People’s Bank of China said the injected funds would mature in one year
at an interest rate of 3.3 percent.
On Friday, 188.5 billion yuan of MLF contracts and 20 billion yuan of
reverse repo securities matured, resulting in a net withdrawal of 20 billion
yuan from the market.
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.
The central bank increasingly relies on open-market operations, rather than
changes in interest rates or reserve requirement ratios, to manage liquidity
in a more flexible and targeted manner.
China will maintain a prudent and neutral monetary policy in 2018 as it
strives to balance growth and risk prevention.
BSS/XINHUA/HR/1250