With CNY 850 billion of MLF loans set to expire this month, the operation resulted in a net CNY 600 billion fresh fund injection into the banking system, the biggest medium-term liquidity injection since 2016.
The decision came after China’s banks extended CNY 738.4 billion in new yuan loans in October 2023, the least in three months, compared to CNY 2310 billion in September.
The PBoC also pumped CNY 495 billion through a seven-day reverse repurchase operation while keeping borrowing costs unchanged at 1.8%, it said in the statement.
Investors now closely watch the meeting between Chinese President Xi Jinping and his US counterpart Biden later today for a potential easing of tensions.
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