The Strategist

People's Bank of China injects 100 bln yuan into the financial system

04/15/2024 - 10:22

The People's Bank of China pumped 100 billion yuan ($13.82 billion) into the financial system as part of its medium-term lending program (MLF) on April 15.

Public Domain Pictures
Public Domain Pictures
The PBC said in a statement that the interest rate on one-year loans made available under the MLF stayed at 2.5%. It was last modified by the bank in August 2023, when it was lowered by 15 basis points (bps).

This month, loans totaling 170 billion yuan are set to expire, resulting in a net outflow of 70 billion yuan from the banking sector. According to Trading Economics, the withdrawals were reported for the second straight month.

The Chinese central bank uses MLF, the significant credit instrument, to give commercial banks liquidity, and this has a direct impact on the benchmark lending rate (LPR). Right now, the annual LPR is 3.45% of its present size.