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People’s Bank of China Maintains MLF Rate at 2.75%, Anticipates No Change in LPR Rate

The People’s Bank of China (PBOC) has decided to keep the one-year medium-term loan facility(MLF) interest rate at 2.75%, the same as the previous level, injecting 481 billion yuan into the economy. Additionally, the PBOC has injected 104 billion yuan through a seven-day reverse repo at a 2.00% interest rate, also unchanged from before.

The extension of MLF loans for the third consecutive month is a measure taken by the PBOC to help banks provide credit to the public, thereby promoting economic growth. The decision aligns with the PBOC’s strategy of maintaining a stable monetary policy and providing sufficient liquidity to the market.

Investors closely monitor the PBOC’s decisions on MLF rates as they are often associated with the Prime Loan Rate (LPR) rates. The PBOC’s announcement today signals no anticipated change in LPR rates.

A reverse repo is a process in which the PBOC purchases securities from commercial banks with an agreement to sell them back in the future, further adding to the market’s liquidity.

The PBOC’s announcement today is expected to bring stability to the financial markets, providing investors with confidence and contributing to the country’s economic growth.

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