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PBOC Lets CNY 100bn MLF Funds Mature

CHINA

The PBOC withdrew CNY 100bn at the MLF operation today, rolling over CNY 600bn and letting CNY 100bn of the total CNY 700bn coming due mature. The Central Bank matched injections with maturities at its OMOs today. There was an earlier article that flagged this course of action could be taken, a piece in the China Securities Journal said the PBOC would increase reverse repo injections this week while not fully roll over maturing MLF funds.

  • Offshore yuan strengthened after the announcement, USD/CNH last down 19 pips at 6.4758, bumping up against Friday's lows. The 10-Year government bond yield erased its gains and last trades at 2.88%.

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