China's central bank cuts medium-term lending rates-Xinhua

China's central bank cuts medium-term lending rates

Source: Xinhua

Editor: huaxia

2023-06-15 16:22:16

File photo shows an exterior view of the People's Bank of China in Beijing, capital of China. (Xinhua/Peng Ziyang)

BEIJING, June 15 (Xinhua) -- China's central bank cut the interest rate of its one-year medium-term lending facility (MLF) from 2.75 percent to 2.65 percent on Thursday, amid efforts to strengthen counter-cyclical adjustment and stabilize market expectations.

The People's Bank of China (PBOC) said it injected 237 billion yuan (33.15 billion U.S. dollars) into the market through a one-year MLF with an interest rate of 2.65 percent.

The move is aimed at keeping liquidity reasonable and ample in the banking system to fully satisfy the needs of financial institutions, according to the central bank.

The MLF tool helps commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.

The cut will lead to lower lending rates, stimulate loan demand, and boost consumption and investment, said Wang Qing, an analyst with Golden Credit Rating.

Earlier this week, the PBOC lowered the seven-day reverse repo rate from 2 percent to 1.9 percent, and announced a cut in the interest rates of its standing lending facility, with the overnight rate down by 10 basis points to 2.75 percent.

Market analysts say that such monetary moves are expected to shore up economic growth, boost market confidence and stabilize the RMB exchange rate in the long run. 


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