China’s Central Bank Adds Liquidity Via Operations

General

China's central bank on Monday added liquidity to the banking system through operations of medium-term lending facility (MLF) and reverse repos.

The People's Bank of China injected 170 billion yuan (about 24.75 billion US dollars) into the market through one-year MLF with an interest rate of 2.75 percent, according to China's News Agency (Xinhua).

The central bank also conducted seven-day reverse repos worth 20 billion yuan at an interest rate of 2 percent.

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

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

Source: Qatar News Agency