Shift from MLF to Seven-Day Reverse Repo Rate

  • China’s central bank keeps key policy rates unchanged
  • Injected 300 billion yuan ($42 billion) via medium-term lending facility
  • Interest rate of 2.3% for MLF remains unchanged
  • Shift in one-year liquidity injection date to August 26th
  • Focus on seven-day reverse repos rate instead of MLF

The People’s Bank of China (PBOC) has maintained its key policy rates, as expected, after a series of rate cuts last month. The central bank injected 300 billion yuan ($42 billion) into the financial system through its medium-term lending facility (MLF), keeping the interest rate at 2.3%. PBOC also announced a change in the one-year liquidity injection date for commercial lenders, moving it from the 15th to the 26th of August without specifying if this is permanent or temporary. As part of its monetary policy overhaul, authorities are emphasizing the importance of the seven-day reverse repo rate and downplaying the role of MLF. The PBOC offered CNY471 billion via a seven-day reverse repo to banks at an unchanged interest rate of 1.7%.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the People’s Bank of China’s actions, including specific details such as the amount of funds injected and interest rates. It also mentions the context of recent rate cuts and the bank’s monetary policy overhaul. However, it lacks any personal perspective or opinion, making it a factual news report.
Noise Level: 3
Noise Justification: The article provides relevant information about the People’s Bank of China injecting funds into the financial system and keeping key policy rates unchanged, but lacks in-depth analysis or exploration of long-term trends or consequences. It also does not offer actionable insights or new knowledge for readers.
Key People:

Financial Relevance: Yes
Financial Markets Impacted: China’s financial system and banks
Financial Rating Justification: The article discusses the People’s Bank of China injecting funds into the financial system, changing its monetary policy, and affecting interest rates for banks. This directly pertains to financial topics and impacts the Chinese financial markets and companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the last 48 hours.
Deal Size: The deal size is $42,000,000,000.
Move Size: No market move size mentioned.
Sector: All
Direction: Up
Magnitude: Large
Affected Instruments: Bonds, Stocks

Reported publicly: www.wsj.com