August 16, 2022
The central bank of China reduced key policy interest rates on Monday, a move that could provide the slowing economy more assistance.
The People’s Bank of China announced that it reduced interest rates on both the seven-day reverse repurchase agreements and the one-year medium-term lending facility by 10 basis points while injecting liquidity through the two instruments.
The seven-day reverse repo rate was reduced to 2.0%, and the one-year MLF rate was trimmed to 2.75%, according to the PBOC.
Since China’s Loan Prime Rate is based on MLF rates, Monday’s reductions may result in a reduction of that rate later this month.
Additionally, on Monday, the central bank added 400 billion yuan ($59.3 billion) in liquidity through the one-year MLF and CNY2 billion through seven-day reverse repos.
Source: MarketWatch
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