The Chinese central bank has cut the rate for its medium-term lending facilities (MLF) amidst efforts by Beijing to curb the impact of the novel coronavirus on China’s economy.
On Monday 17 February the People’s Bank of China (PBOC) made 200 billion yuan (approx. USD$28.65 billion) of loans via one-year MLF’s and an injection of 100 billion yuan via 7-day reverse repos.
The move coincided with the expiration of one trillion yuan in reverse repos on the same date. No MLF loans were set to mature on Monday.
The rate for PBOC’s one-year MLF was 3.15%, for a reduction of 10 basis points compared to its last MLF operation.
The move comes following a reduction in the rates for reverse repos by 10 basis points at the start of February, with PBOC cutting the 7-day reverse repo rate to 2.4% from 2.5%, and the 14-day reverse repo rate to 2.55% from 2.65%, for a 10% trim across the board.
Just after the close of the Lunar New Year the PBOC made a mass injection of 1.7 trillion yuan on 3 – 4 February via open market operations.
PBOC said that its open market operations were for the purpose of ensuring ample liquidity levels during efforts to combat the novel coronavirus.