The People’s Bank of China (PBOC) has injected 200 billion yuan (approx. USD$28.19 billion) via medium-term lending facilities (MLF) on 15 June 2020.
The term for the MLF was one-year, while the rate remained the same as the previous operation at 2.95%.
According to PBOC the purpose of the injection is maintain “rationally ample” liquidity in the Chinese banking said.
In June 740 billion MLF are scheduled to mature, for the highest volume on record.
PBOC previously said on 8 June that it would extend MLF maturing around 15 June, with the specific amount to be determined based on market conditions.
Bank of China researcher Li Peijia (李佩珈) said that looking at fiscal deposits, maturing MLF and funds outstanding for foreign exchange, June is likely to see an expanding shortfall in funds, and needed an expansion in monetary policy tool support measures.
Enterprises in China make their tax payments in June, which will lead to an increase in fiscal deposits, leading to a reduction in the money supply.
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