The central bank will conduct 600 billion yuan MLF operations tomorrow, continuing the increase for 12 consecutive months

The People’s Bank of China continues to increase medium- and long-term funding, with the Medium-term Lending Facility (MLF) to be extended with additional amounts for 12 consecutive months.

On February 24, the People’s Bank of China announced an MLF tender, stating that to maintain ample liquidity in the banking system, on February 25, it will conduct a 600 billion yuan MLF operation with a fixed amount and interest rate, using a multiple-price bidding method, with a one-year maturity.

Given that 300 billion yuan of MLF will mature this month, the central bank net injected 300 billion yuan through MLF in February. This marks the 12th consecutive month of increased MLF operations by the central bank.

In February, the central bank also increased long-term liquidity through outright reverse repurchase agreements. The total scale of the two maturity varieties of outright reverse repos in February was 600 billion yuan, marking the ninth consecutive month that the central bank has injected medium-term liquidity into the market through outright reverse repos, with the scale of increase further expanding from 300 billion yuan last month.

(Source: The Paper)