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China central bank injects US$22.8b via short-term liquidity operations

[BEIJING] China's central bank injected 150 billion yuan (US$22.80 billion)into banks on Wednesday through its short-term liquidity operations (SLO) tool, according to a statement on its website.

The interest rate on the 6-day lines of credit will be 2.25 per cent, the People's Bank of China (PBOC) said. No details were provided.

The PBOC injected 55 billion yuan via a 3-day SLO on Monday. It also injected 410 billion yuan into the nation's banking system via its medium-term lending facility (MLF) and lowered rates for three-month and one-year tenors on Tuesday.

The central bank said on Tuesday that it would inject over 600 billion yuan to help ease a liquidity squeeze expected before the Lunar New Year in early February. It said it would inject the funds via the standing lending facility (SLF), medium-term lending facility (MLF) and pledged supplementary lending (PSL) policy tools.

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The PBOC launched SLOs in 2013 to supplement its other monetary policy tools. The facility is mainly used to provide one- to three-day direct lines of credit to commercial banks, though loans with other maturities are occasionally used.