Beijing, Feb 19 (IANS) China’s central bank on Friday pumped 163 billion yuan (about $25 billion) into the financial system in open market operations via medium-term lending facility (MLF).
The MLF is a liquidity tools the bank introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank by using securities as collateral, Xinhua reported.
The fresh funds were injected into 20 financial institutions, according to the People’s Bank of China (PBOC). MLF worth 110 billion yuan had been due on the same day.
Among the new funds, 47.5 billion yuan is for three months, 62 billion yuan for six months, and 53.5 billion yuan for one year, at interest rates of 2.75 percent, 2.85 percent and three percent, respectively.
The bank lowered the six month rate from three percent to 2.85 percent, and that for one-year from 3.25 percent to three percent. The three month rate remained unchanged.
The PBOC injected more than 1.5 trillion yuan into the market in January via MLF, the standing lending facility and pledged supplementary lending operations.