February 16, 2017 / 3:33 AM / a year ago

TLF loans due Thursday at some Chinese banks won't be rolled over - sources

SHANGHAI, Feb 16 (Reuters) - Temporary liquidity facility (TLF) loans maturing on Thursday at some major Chinese commercial banks will not be rolled over, two banking sources with direct knowledge of the matter said.

One of the sources, who requested anonymity, said the absence of the rollover would not impact market liquidity, as funds injected by the central bank through other channels, including reverse repurchase agreements, were sufficient.

The People’s Bank of China (PBOC) introduced the TLF loans in mid- January to help several major commercial banks flush with funds ahead of Lunar New Year holiday.

It was not immediately clear if other TLF loans maturing on Thursday and on Friday would be treated the same way.

Investors and companies are watching the central bank’s liquidity operations even more intently than usual after the PBOC surprised traders on Feb. 3 by raising short-term interest rates, in a further sign of policy tightening as the economy shows signs of steadying. (Reporting by Shanghai Newsroom; Editing by Kim Coghill)

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