China cuts interest rates of medium-term lending facility, reverse repos

ISTANBUL

The People’s Bank of China on Tuesday cut interest rates for the medium-term lending facility (MLF) and reverse repos by 15 and 10 basis points, respectively.

The central bank said it decreased the rate for MLF to 2.5% and for reverse repos to 1.8% “in order to offset the impact of peak period for tax payment, and keep the liquidity of the banking system adequate at a reasonable level.”

The bank injected 401 billion yuan ($55 billion) into the market through one-year MLF and conducted seven-day reverse repos worth 204 billion yuan ($28 billion).

The US dollar/yuan parity, which was at 7.2 on Monday, is currently at 7.28.