China's Central Bank Rollover MLF with Increased Amount; Analysts Say It Helps Dispel Market Worries About Liquidity Tightening
The People's Bank of China (PBOC) announced on March 24th that to maintain ample liquidity in the banking system, it will conduct a 500 billion yuan Medium-term Lending Facility (MLF) operation on March 25th using a fixed-quantity, rate-tender, multiple-price bidding method, with a maturity of one year. This operation is an increased rollover, resulting in a net injection of 50 billion yuan. Dong Ximiao, Chief Economist at Zhaolian, stated that following two instances of reduced rollover operations in March's outright reverse repos, this increased rollover MLF operation sends a clear signal and will help dispel market concerns about potential liquidity tightening.
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