ZCZC
BCN-18
CHINA-BANK-LIQUIDITY
China’s central bank injects liquidity into market in September
BEIJING, Oct. 14, 2018 (BSS/Xinhua) – China’s central bank continued to
pump cash into the money market in September to meet demand for liquidity
from financial institutions.
A total of 441.5 billion yuan (63.8 billion U.S. dollars) was injected
into the market via the medium-term lending facility (MLF) last month to
maintain liquidity in the banking system at a reasonable and ample level,
according to the People’s Bank of China (PBOC). The funds will mature in one
year at an interest rate of 3.3 percent.
Total outstanding MLF loans reached 5.38 trillion yuan as of the end of
September.
The MLF tool was introduced in 2014 to help commercial and policy banks
maintain liquidity by allowing them to borrow from the central bank using
securities as collateral.
In September, the PBOC also injected 12.5 billion yuan of funds through
pledged supplementary lending to the China Development Bank, the Export-
Import Bank of China, and the Agricultural Development Bank of China.
Another 47.5 billion yuan was lent to financial institutions through the
standing lending facility to meet provisional liquidity demand.
The central bank has adopted open market operations more frequently to
manage liquidity in a more flexible and targeted manner.
The government is maintaining a prudent and neutral monetary policy in
2018 to balance growth and risk prevention.
BSS/XINHUA/HR/1435