China conducts 900-billion-yuan MLF operation to maintain banking liquidity – KBC

China’s central financial institution on Monday performed a 900-billion-yuan (about 125.14 billion U.S. {dollars}) medium-term lending facility (MLF) operation to take care of cheap and ample liquidity within the nation’s banking system.

The MLF operation incorporates a one-year maturity interval and an rate of interest of two p.c, unchanged from the speed of the earlier operation performed final month, in keeping with an announcement on the web site of the People’s Bank of China.

After the newest operation, the excellent MLF steadiness stood at 6.239 trillion yuan.

“The MLF rate follows market trends and fluctuates in sync with market interest rates. Recently, policy interest rates and the loan prime rate, a market-based benchmark lending rate, have remained stable, hence the MLF rate also remains unchanged this month,” stated Wang Qing, chief macro analyst at Golden Credit Rating.

Some 1.45 trillion yuan of MLF funds will mature this month. The central financial institution performed 500 billion yuan of outright reverse repos in October, which was equal to releasing a level of medium-term liquidity upfront.

At current, long-term liquidity out there stays comparatively considerable, analysts acknowledged.