China's central bank adds liquidity into system via MLF, reverse repos

Through a reverse repo, the central bank purchases securities from commercial banks through bidding, with an arrangement to sell them back in future.

The central bank conducted 4 billion yuan ($562.2 million) of seven-day reverse repos at an interest rate of 1.8 per cent.

A total of 182 billion yuan ($25.08 billion) was also injected into the market via the MLF, which will mature in a year at an interest rate of 2.5 per cent, a state-controlled media outlet reported.

Introduced in 2014, MLF was intended to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.

ALCHEMPro News Desk (DS)