BEIJING/SHANGHAI, Nov 4 (Reuters) - China’s central bank will conduct medium-term lending facility (MLF) operations on Tuesday to roll over maturing loans, two traders with direct knowledge of the matter said.
Both traders received an MLF operation notice from the People’s Bank of China (PBOC).
A batch of 403.5 billion yuan ($57.44 billion) worth of MLF loans is due to expire on Tuesday. Markets will closely gauge the size and interest rate on the fresh MLF loan injection for the central bank’s monetary policy stance.
The MLF now acts as a guide for the PBOC’s new lending benchmark Loan Prime Rate (LPR).
The one-year MLF rate, last cut in February 2016, now stands at 3.3%.
China’s central bank surprised markets by not issuing targeted medium-term loans in October, adding to uncertainty over how policymakers plan to stabilise the economy as growth nears 30-year lows.
$1 = 7.0253 Chinese yuan Reporting by Zhang Xiaochong and John Ruwitch; Writing by Winni Zhou; Editing by Kim Coghill