People’s Bank of China Injects Liquidity to Ensure Smooth Credit Flow

According to Xinhua’s report on Monday, the People’s Bank of China (PBC) executed seven-day reverse repos totaling two billion yuan ($281.77 million) at an interest rate of 1.8 percent. This move is aimed at maintaining a seamless credit flow within the financial system.

To provide a more stable source of funding, the bank utilized the medium-term lending facility (MLF). Through the MLF mechanism, commercial and policy banks can access funds from the central bank for a period of one year at a fixed interest rate of 2.5 percent.

The injection of liquidity by the PBC is intended to foster an environment conducive to lending by banks. This action stimulates economic activity by ensuring that businesses have access to the necessary capital for investment and expansion.



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