FX.co ★ PBoC Injects CNY 600 Billion into Banking System

On April 25th, the People's Bank of China (PBoC) infused CNY 600 billion into financial institutions via a one-year medium-term lending facility (MLF). With CNY 100 billion in MLF funds set to mature this month, this action led to a net liquidity injection of CNY 500 billion. This net injection is significantly larger than the CNY 63 billion recorded in the prior month. As of last month, the central bank has implemented a multiple-price bidding process for MLF operations, moving away from setting a fixed interest rate. Although the MLF rate historically served as China's main policy rate, the PBoC has recently shifted its attention to employing a shorter-term monetary policy tool to more effectively manage market interest rates.