PBOC Expected to Inject Liquidity on Friday following MLF Queries with Banks

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The Chinese central bank is expected to inject liquidity via medium-term lending facilities this Friday after pursuing queries about capital demand with commercial lenders.

Sources cited by Reuters said that the People’s Bank of China has made inquiries with commercial banks about their demand for MLF loans in the lead up to the maturation of 84 billion yuan (USD$12.68 billion) in 12-month MLF’s on October 13.

Two more batches of MLF’s worth a total of 355.5 billion yuan are scheduled for maturation the following week.

While the market sources said to Reuters that PBOC is set to inject funds via MLF’s on Friday, the amount, maturities and rates remain unspecified.

PBOC has made increasing use of MLF to adjust liquidity levels in China’s banking system, as well as guide medium-term interest rates.

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