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MNI: PBOC Cuts MLF, Reverse Repo Rates By 10 Bps Apiece

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The People's Bank of China (PBOC) unexpectedly lowered two key policy interest rates on Monday, after total social financing fell to a six-year low in July. The easing of the MLF and 7-day reverse repo rates represented the first such cuts since January of this year.

The PBOC cut the rate applied to the one-year medium-term lending facility by 10 bps to 2.75%, while it injected CNY400 billion in gross liquidity via the instrument. Meanwhile, it also lowered the rate applied to 7-day reverse repos by 10 bps to 2.00% while injecting CNY2 billion in gross liquidity via the instrument. This resulted in a net drain of CNY200 billion given today's maturity of CNY600 billion of MLFs and CNY2 billion of reverse repos, according to Wind Information.

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The People's Bank of China (PBOC) unexpectedly lowered two key policy interest rates on Monday, after total social financing fell to a six-year low in July. The easing of the MLF and 7-day reverse repo rates represented the first such cuts since January of this year.

The PBOC cut the rate applied to the one-year medium-term lending facility by 10 bps to 2.75%, while it injected CNY400 billion in gross liquidity via the instrument. Meanwhile, it also lowered the rate applied to 7-day reverse repos by 10 bps to 2.00% while injecting CNY2 billion in gross liquidity via the instrument. This resulted in a net drain of CNY200 billion given today's maturity of CNY600 billion of MLFs and CNY2 billion of reverse repos, according to Wind Information.

Keep reading...Show less