FX.co ★ PBoC Injects CNY 900 Billion of MLF into Banking System

On October 27, the People’s Bank of China (PBoC) injected a substantial CNY 900 billion into financial institutions via its one-year Medium-Term Lending Facility (MLF). This move is part of the central bank's strategy to ensure sufficient liquidity within the banking system. With CNY 700 billion in MLF funds set to mature this month, this operation effectively resulted in a net liquidity injection of CNY 200 billion. This marks the eighth straight month of net MLF injections. The central bank employed a fixed-quantity, interest-rate bidding, and multiple-price bidding method for this operation. Adopted in March, this technique implies that the PBoC no longer sets a pre-determined interest rate for MLF operations. It's noteworthy that this month's net injection is lower than the CNY 300 billion net injection observed in September.