Chinese central bank expands banks' medium-term lending facility: sources

[BEIJING] The Chinese central bank has expanded its medium-term lending facility (MLF), which is now estimated at a total 450-500 billion yuan (S$101-112 billion), banking sources said.

The People's Bank of China rolled over all of the around 350 billion yuan in MLF that was due to mature on Tuesday and added more for some banks, the sources said.

The PBOC did not respond to Reuters' request for comment.

The PBOC created the MLF monetary tool, by which it sets aside designated amounts of money of three months in duration for individual banks to withdraw in case they need additional liquidity. The tool is similar to the US Federal Reserve's discount window.

The central bank accumulatively conducted MLF operations worth 1.14 trillion yuan last year, with the outstanding amount at 644.5 billion yuan by the end of year.

To counter a sharp slowdown in the world's second-largest economy, China cut official interest rates on Feb 28 after its first rate cut in more than two years in November and a reduction in banks' reserve requirement ratios in early February.

REUTERS