Chinese Central Bank Injected 570bn Via MLF, SLF, PSL in February

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The latest report from the People’s Bank of China on its deployment of monetary policy tools indicates that it injected 571.38 billion yuan in liquidity via standing lending facilities, medium-term lending facilities and pledged supplementary lending during the month of the Chinese Lunar New Year

As part of efforts to meet the short-term liquidity needs of financial institutions during the holiday season, in February PBOC undertook a total of 27.38 billion yuan in SLF, including 150 million via overnight instruments, 10.5 billion yuan via seven day maturities and 16.73 billion yuan via maturities of a month.

As of the end of February the SLF balance stood at 21.34 billion yuan.

PBOC said that SLF rates served to put a ceiling on the rates corridor, helping to ensure that money market rates remained on an even keel.

The Chinese central bank also said that in order to keep liquidity in the banking sector at “rationally stable” levels, it undertook 393 billion yuan in 1-year MLF in February based on the liquidity needs of financial institutions, at a rate of 3.25%.

This marks the second time this year the PBOC has undertaken MLF operations, raising the MLF balance to 4,779.5 billion yuan as of the end of February.

PBOC also provided a net total of 151 billion yuan in PSL to China’s three policy banks of the China Development Bank, the Exim Bank of China and and the Agricultural Development Bank of China, bringing the PSL balance to 2,910.6 billion yuan by the end of February.

In addition to the use of these monetary policy instruments, the Chinese central bank also provided contingent reserve arrangements (CRA)

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