MNI BRIEF: PBOC Cuts One-year MLF Rate By 20bp
The PBOC has unexpectedly cut the MLF rate.
The People’s Bank of China unexpectedly cut the one-year medium-term lending facility rate by 20 basis points to 2.3%, its first cut since August 2023, and injected CNY200 billion via the tool into the interbank market on Thursday, according to a statement on the Bank’s website.
The PBOC kept the rate unchanged on July 15 when it conducted its regular monthly MLF operations. (See MNI PBOC WATCH: PBOC Cuts 7-Day Rate As Reconfigures Framework)
The reduction, however, came after the six state-own banks announced cuts to their deposit interest rates. From July 25 demand deposit rates will fall 5bp, while one-year, and two-year and above rates will reduce by 10 and 20bp respectively, according to the banks' announcement.