People's Bank of China Medium-term Lending Facility (MLF)

PBOC inject 103bn yuan via a one-year MLF at 2.65% 9circa 125bn was expected, prior 237bn injection)

  • 100bn yuan of MLF are maturing today
  • thus net MLF injection is 3bn yuan


The PBOC's MLF rate is a benchmark interest rate that banks in China can use to borrow funds from the People's Bank of China for a period of 6 months to 1 year, medium-term liquidity to commercial banks.

The rate is typically announced on the 15th of each month. Given the 15th was on Saturday we're getting it today instead.

The interest rate on the MLF loans is typically higher than the benchmark lending rate (more on these below), which encourages banks to use the facility only when they face a shortage of funds.

The MLF rate sets the scene for the monthly Loan Prime Rate (LPR) setting on the 20th. Current LPR rates are:

  • 3.55% for the one year
  • 4.20% for the five year

MLF loans are secured by collateral, which can be a wide range of assets including bonds, stocks, and other financial instruments. The collateral ensures that the PBOC can recover the funds if the borrower defaults on the loan.