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China’s Central Bank to Add Liquidity Through Medium-Term Lending Operation
(MENAFN) The People’s Bank of China (PBOC) has declared that it will supply 600 billion yuan (approximately $88.2 billion) to the financial system on May 25 via its medium-term lending facility, which is used for lending to financial institutions.
The central bank explained that this move is intended to ensure adequate liquidity within the banking system. It will be carried out through a fixed-amount, floating-rate, and multi-price bidding mechanism.
After accounting for repayments of 500 billion yuan (around $73.5 billion) in maturing central bank debt by financial institutions this month, the net liquidity injection will amount to 100 billion yuan (about $14.7 billion).
The medium-term lending facility enables Chinese commercial banks to secure one-year loans from the PBOC by pledging securities as collateral.
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