PBOC Undertakes 400B Yuan in MLF Operations in July, 2.63B Yuan in SLF

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The Chinese central bank has just released a raft of data on its open market operations for the month of July.

Data published by the official website for the People’s Bank of China (PBOC) on 3 August indicates that it undertook 400 billion yuan in medium-term lending facility (MLF) operations in July.

The instruments had tenors of one year and a rate of 2.95%, and as of the end of July the outstanding MLF balance was 3.55 trillion yuan.

PBOC said it undertook the MLF operations for the purpose of maintaining the rationally ample liquidity of the banking system, and following consideration of the liquidity needs of financial institutions.

PBOC also said that it undertook 2.63 billion yuan in standing lending facility (SLF) operations in July for domestic Chinese financial institutions, including 700 million yuan in overnight SLF, 100 million yuan in 7-day SLF and 2.55 billion yuan in 1-month SLF.

PBOC said that SLF rates play the role of imposing a ceiling on interest rates, and are of benefit to stabilising the operation of money market rates.

As of the end of July the outstanding SLF balance was 2.55 billion yuan.

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