PBOC sells CNY400 billion via one-year MLF at 2.75%
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The People’s Bank of China (PBOC) sold CNY400 billion via one-year medium-term lending (MLF) facility on Monday.
The Chinese central bank cut the rate for one-year MLF operation rate to 2.75% vs. 2.85% previous. The PBOC broke the status-quo after the fifth straight meeting.
The MLF rate is considered a key indicator of the benchmark loan prime rate (LPR) due to be announced next week.
The PBOC slashed its 7-day reverse repos to 2% vs. 2.10% prior.
China’s 10-year yield falls 3bps to 2.7% following the central bank rate cut. USD/CNY remains unfazed by the latest PBOC operation. The spot is currently trading flat at 6.7429.
Meanwhile, the AUD/USD pair has turned on the defensive after the PBOC announcement, awaiting the Chinese activity numbers for fresh impetus. At the time of writing, the pair is losing 0.08% on the day to trade at 0.7113.
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