China Holds MLF Rate Steady

The People’s Bank of China (PBoC) launched a total of CNY 100 billion via a one-year medium-term lending facility (MLF) to the financial institutions while keeping the interest rate at 2.50% as expected on July 15th, amid the central bank's ongoing efforts to stabilize the yuan.

The currency weakness remained the key constraint limiting Beijing's monetary easing efforts, as that could further widen the yield gap with other major economies.

With CNY 103 billion worth of MLF loans set to expire this month, the central bank drained a net CNY 3 billion of cash from the banking system.

The PBoC also injected 129 billion yuan through seven-day reverse repurchase operations and kept the seven-day interest rate steady at 1.8%.