PBoC tweaks lending facility as framework reform continues
Chinese central bank phases out MLF’s role in monetary policy by allowing dynamic pricing
The People’s Bank of China has made slight tweaks to its medium-term lending facility (MLF), thereby continuing the reform of its monetary policy framework.
The PBoC yesterday (March 24) announced that the MLF – whereby banks can borrow from the central bank for a year with qualified collateral – would be operated through “variable-rate tenders with a fixed quantity in the form of multiple-price auction” beginning this month.
This means banks will be able to borrow via the MLF at a dynamic price
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