PBOC sets 7-day reverse repos to boost liquidity

The People’s Bank of China (PBOC) conducted on Sunday reverse repo operations totaling 105 billion yuan and Medium-term Lending Facility (MLF) operations totaling 500 billion yuan to maintain adequate liquidity in the banking system.

The central bank’s statement showed that the reverse repo operation is for a period of seven days at an interest rate of 1.80 per cent, while the interest rate on MLF operation remains unchanged at 2.50 per cent.

The benchmark loan prime rate (LPR) could fall in the coming days, with the five-year tenor more likely to be reduced, according to market watchers, Reuters reported. Lowering the five-year LPR will help stabilise confidence, promote investment and consumption, and support the real estate market’s stable and healthy development.