The People's Bank of China launched an 800 billion yuan MLF operation, with a net investment scale of 200 billion yuan
Quick Look
- The People's Bank of China announced that it will launch an 800 billion yuan one-year MLF operation on September 24.
- Excluding the 600 billion yuan due this month, a net injection of 200 billion yuan was achieved, which was the third consecutive month of net injection, aiming to support the issuance of government bonds and maintain sufficient market liquidity.
AI-generated summary
Why It Matters
This month, 600 billion yuan of MLF expired, and the central bank achieved a net investment of 200 billion yuan through this operation. This is the third consecutive month that the central bank has maintained net investment to support government bond issuance.
China News Service, Beijing, September 23 (Tao Siyue) The Central Bank of China announced on the 23rd that it will launch an 800 billion yuan (RMB, the same below) MLF (medium-term lending facility) operation on the 24th, with a term of one year.
Data shows that 600 billion yuan of MLF expires this month, which means that the MLF operation will increase by 200 billion yuan this time. The buyout reverse repurchases of the two types of maturities in September were all continued in equal amounts. Therefore, the central bank's mid-term liquidity operations this month added a total of 200 billion yuan, which was the third consecutive month of net investment. The net investment scale was 100 billion yuan higher than the previous month.
According to analysis by the Oriental Jincheng research team, government bond issuance has increased recently, and the central bank has injected medium-term liquidity into the market through MLF to support the smooth issuance of government bonds and reflect the coordination of fiscal and monetary policies.
At the same time, MLF's increased volume and continuation will also help maintain sufficient funds and stabilize market expectations. Industry experts said that China's monetary and financial environment is generally relatively loose. Since this year, the central bank has used a variety of monetary policy tools to introduce reform measures to improve the short-end interest rate control mechanism, further improving the accuracy and effectiveness of liquidity management.
Open Questions
- The direction of the subsequent combination of monetary policy tools
- Market reaction to the degree of easing funding
