China conducts 300-bln-yuan MLF operation to sustain banking liquidity

China's central bank on Tuesday conducted a 300-billion-yuan (US$41.83 billion) medium-term lending facility (MLF) operation to maintain ample liquidity in the country's banking system.

The MLF operation features a one-year maturity period and an interest rate of 2 percent, unchanged from the rate of the previous operation conducted last month, according to a statement on the website of the People's Bank of China.

After the latest operation, the outstanding MLF balance stood at 4.09 trillion yuan.

Tuesday's operation was a scaled-down rollover, as a total of 500 billion yuan of MLF will mature this month.

The central bank conducted 1.7 trillion yuan of outright reverse repos in January, which was equivalent to releasing a degree of medium-term liquidity in advance, said Wang Qing, chief macro analyst at Golden Credit Rating.

At present, medium-term liquidity in the market is kept abundant to support banks in increasing credit supply, facilitate government bond issuance, and stabilize market expectations, the analyst noted.