The Chinese central bank has injected 200 billion yuan into the domestic banking system via medium-term lending facilities (MLF), as well as implemented the last of three targeted reserve ratio cuts first unveiled in May.
On 15 July the People’s Bank of China (PBOC) undertook 200 billion yuan in MLF operations. The instruments had a term of one year with a rate of 3.30%.
On the same day 188.5 billion yuan in MLF matured, while PBOC did not engage in any reverse repo operations.
PBOC also announced the implementation on 15 July of the last of three targeted adjustments to the required reserve ratio that were first launched on 15 May.
The adjustments affect rural village commercial banks that provide their services to China’s county-level administrative entities.
According to PBOC the move is expected to unleash approximately 100 billion yuan in long-term funds.