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China central bank pumps more funds into financial system

Xinhua, April 13, 2016 Adjust font size:

The central bank on Wednesday pumped 285.5 billion yuan (about 44 billion U.S. dollars) into the financial system in open market operations via medium-term lending facility (MLF).

The People's Bank of China (PBOC) said the operations were aimed at maintaining liquidity in the financial system at a "reasonably abundant" level.

The MLF is a tool introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank by using securities as collateral.

The fresh funds were injected into 17 financial institutions, according to the PBOC.

Among the new funds, 127 billion yuan is for 3 months, and 158.5 billion yuan is for 6 months, at interest rates of 2.75 percent and 2.85 percent.

The interest rates were left unchanged to "guide financial institutions to boost support for key areas and vulnerable links of the national economy," the central bank said.

To bolster the lukewarm economy, China has adopted a more pro-growth policy stance, cutting benchmark interest rates and banks' reserve requirement ratio (RRR) multiple times since 2014.

At a press briefing last month, a central bank spokesperson described its monetary policies as "prudent with a slight easing bias."

The Chinese economy posted its lowest annual expansion in a quarter of a century at 6.9 percent in 2015, and the National Bureau of Statistics is scheduled to release data for the first quarter this year on Friday. Endit