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By Archie Zhang
     BEIJING (MNI) - The People's Bank of China is expected to lower the rate
for Medium-term Lending Facility (MLF) in February and effectively guide the
Loan Prime Rate (LPR) lower, according to a member of a PBOC committee.
     Ma Jun, a member of the Monetary Policy Committee under the central bank,
told state-media Financial News that current liquidity in the banking system is
"very ample" as it is CNY900 billion higher than the last post-Chinese New Year
period, and beyond the market's expectation.
     The PBOC injected a net of CNY150 billion through open market operations on
Monday while lowering the money market rates by 10 bps to counter the economic
impact of the Coronavirus epidemic.
     In the same interview posted on PBOC's official social media account, Ma
said the lowered money market rates have the effect of cutting interest rates
anticipated by some market participants, stabilizing the expectations of
investors and boosting confidence in the finance market.
     The rate cut can push down interest rates in the wider market, reducing the
cost of capital, alleviating the financial pressure of companies, supporting the
real economy and mitigating the impact of the epidemics on medium and small
companies, Ma said.
     Today's liquidity injection, together with the impact of lowering the
Required Reserve Ratio in January, will probably nudge down the LPR on 20th
February, according to Ma. The LPR is a market-oriented basis all banks use to
price loans. 
--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com
[TOPICS: MMQPB$,M$A$$$,M$Q$$$]