PBOC on the wires confirming an adjustment to Medium Term Lending Facility
- will inject yuan 600bln via MLF, SLF and PSL
- will keep liquidity in banking system reasonably adequate
- will keep markets interest rates stable
- volatility in liquidity has increased ahead of lunar new year
The MLF is a supplementary liquidity management tool that the central bank uses occasionally to boost liquidity. There has been talk of the PBOC checking the needs of various banks lately so this move should come as no surprise.
Liquidity generally increases into the lunar holiday to offset increased cash demand.
Eamonn had this yesterday on possible reverse repos.
Update 11.25 GMT
Reuters reporting Chinese state tv confms that the PBOC injected yuan 410 bln into the system today via MLF
