The central bank continued to make an excess of 789 billion MLF in October: 289 billion net investment with unchanged interest rate

The one-year MLF rate, as the medium-term policy rate, remained unchanged for two consecutive months.

The People's Bank of China announced on October 16 that, in order to maintain a reasonable and sufficient liquidity of the banking system, it will carry out 106 billion yuan of open market reverse repurchase operations and 789 billion yuan of medium-term lending facilities (MLF) operations on October 16, 2023, which fully meet the needs of financial institutions, and the bid winning interest rates remain unchanged.

In view of the 500 billion yuan MLF expiring this month, the central bank has invested a net 289 billion yuan in the renewal of MLF in October.

The central bank has exceeded MLF for 11 consecutive months, and significantly expanded the scale of net investment for two consecutive months. In December last year, January, February, March, April, May, June, July, August and September this year, we added 150 billion yuan, 79 billion yuan and 1990 billion yuan, 281 billion yuan, 20 billion yuan, 25 billion yuan, 37 billion yuan, 3 billion yuan, 1 billion yuan, 191 billion yuan and 289 billion yuan respectively.

Since this year, the MLF interest rate has been cut by 25 basis points twice, 10 basis points and 15 basis points respectively in June and August, and remained unchanged in the rest of the month.

Since late August, the Central Bank has intensively implemented a series of interest rate policies, playing a positive role in promoting consumption, stabilizing investment and expanding domestic demand. The pertinence and synergy of interest rate policies have been significantly enhanced. In September, the weighted average interest rate of new loans issued by enterprises was 3.85%, 14 basis points lower than the same period last year. At the same time, we promoted the implementation of the policy to reduce the interest rate of the first housing loan in stock. At the end of September, the weighted average interest rate of the housing loan in stock was 4.29%, 42 basis points lower than that at the end of last month, and achieved a significant decline.

key word: interest rate basic point policy stock