China's central bank adds liquidity via operations
Baku, October 17, AZERTAC
China's central bank on Monday added liquidity to the banking system through operations of medium-term lending facility (MLF) and reverse repos, according to Xinhua.
The People's Bank of China injected 500 billion yuan (about 70.33 billion U.S. dollars) into the market through one-year MLF with an interest rate of 2.75 percent.
The MLF tool helps commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.
The central bank also conducted seven-day reverse repos worth 2 billion yuan at an interest rate of 2 percent.
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.
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