12 Feb 2015
PBOC widens SLF to improve liquidity
FXStreet (Mumbai) - The People's Bank of China (PBOC) announced on Wednesday that it would expand one of its short-term financing frameworks countrywide to cover small and medium sized banks nationwide in its latest effort to ensure money supply.
The decision will "improve channels for liquidity support for medium- and small- financial institutions and address seasonal volatility in liquidity before the Chinese New Year", the bank said in a short note.
In other words, the Standing Lending Facility (SLF) will be switched into a nationwide channel after a pilot in ten regions covering small and medium-sized lenders.
Urban commercial banks, rural commercial and cooperative banks and rural credit cooperatives will likely benefit.
Earlier on Tuesday, the bank pumped 80 billion Yuan (USD13.05 billion) into the money markets through 14-day and 21-day reverse repos to meet the rising cash demand before the holiday.
The decision will "improve channels for liquidity support for medium- and small- financial institutions and address seasonal volatility in liquidity before the Chinese New Year", the bank said in a short note.
In other words, the Standing Lending Facility (SLF) will be switched into a nationwide channel after a pilot in ten regions covering small and medium-sized lenders.
Urban commercial banks, rural commercial and cooperative banks and rural credit cooperatives will likely benefit.
Earlier on Tuesday, the bank pumped 80 billion Yuan (USD13.05 billion) into the money markets through 14-day and 21-day reverse repos to meet the rising cash demand before the holiday.