(ATF) China’s central bank pumped cash into the financial system through open market operations onWednesday.
A total of 400 billion yuan ($57bn) was injected into the market via the medium-term lending facility (MLF), according to the People’s Bank of China.
The funds will mature in one year at an interest rate of 2.95%.
The central bank skipped reverse repos the same day.
The MLF tool was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.
China has said it will pursue a prudent monetary policy in a more flexible and appropriate way to support the country’s recovery from the downturn, which inflicted the first quarterly GDP contraction on three decades.
China will use a variety of tools including required reserve ratio reductions, interest rate cuts, and re-lending to enable M2 money supply and aggregate financing to grow at notably higher rates than last year, the government’s annual report said.
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