PBoC Injects CNY 600 Billion into Banking System

The People’s Bank of China (PBoC) injected a total of CNY 600 billion into financial institutions on August 25 through its one-year medium-term lending facility (MLF), aiming to maintain ample liquidity in the banking system. With CNY 300 billion in MLF funds maturing this month, the operation resulted in a net liquidity injection of CNY 300 billion—marking the sixth consecutive month of net MLF injections. The central bank conducted the operation using a fixed-quantity, interest-rate bidding, and multiple-price bidding method. This approach, introduced in March, means the PBoC no longer announces a fixed interest rate for MLF operations. This month’s net injection was higher than the CNY 100 billion added in July, suggesting a more accommodative stance to support liquidity and economic activity. The central bank also conducted CNY 288.4 billion in seven-day reverse repurchase operations in the open market today, with the interest rate held steady at 1.4%.