BCN-31Central bank injects liquidity into market

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ZCZC

BCN-31

CHINA-BANK-LIQUIDITY

Central bank injects liquidity into market

BEIJING, Sept. 9, 2018 (BSS/Xinhua) – China’s central bank continued to
pump cash into the money market in August to meet financial institutions’
demand for liquidity.

The People’s Bank of China (PBOC), the central bank, said 532 billion yuan
(about 77.8 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.

The funds will mature in one year at an interest rate of 3.3 percent.

Total outstanding MLF loans reached 5.12 trillion yuan as of the end of
August.

The MLF tool was introduced in 2014 to help commercial and policy banks
maintain liquidity by allowing them to borrow money from the central bank
using securities as collateral.

In August, the PBOC also injected 9.1 billion yuan of funds through
pledged supplementary lending to China Development Bank, The Export-Import
Bank of China, and the Agricultural Development Bank of China.

The central bank has adopted open-market operations more frequently to
manage liquidity in a more flexible and targeted manner.

The government maintains a prudent and neutral monetary policy in 2018 as
it strives to balance growth and risk prevention.

BSS/XINHUA/HR/1250