FX.co ★ China to Conduct CNY 1 Trillion MLF Operation Today

On November 25, the People’s Bank of China (PBoC) infused CNY 1 trillion (approximately USD 141.15 billion) into financial institutions through its one-year Medium-Term Lending Facility (MLF). This move was designed to ensure abundant liquidity within the banking sector. Given that CNY 900 billion in MLF funds is set to mature this month, the operation effectively provided a net liquidity boost of CNY 100 billion. This marks the ninth consecutive month of net MLF injections by the central bank. The liquidity provision was executed via a method that involved fixed-quantity, interest-rate bidding, and multiple-price bidding. Notably, this month's net injection falls short of the CNY 200 billion recorded in October. The MLF, established in 2014, assists commercial and policy banks in maintaining liquidity, enabling them to borrow from the central bank by using securities as collateral.