The headquarters of the People's Bank of China, March 13, 2018 . (Photo: Xinhua)
China's central bank continued to pump cash into the money market in December to meet liquidity demand from financial institutions.
A total of 600 billion yuan (about $85.7 billion) was injected into the market via the medium-term lending facility (MLF) last month to maintain liquidity in the banking system at a reasonably sufficient level, according to the People's Bank of China (PBOC).
The funds will mature in one year at an interest rate of 3.25 percent.
Total outstanding MLF loans reached 3.69 trillion yuan as of the end of December.
The MLF tool was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.
In December, the PBOC also injected 60.5 billion yuan of funds through pledged supplementary lending to the China Development Bank, the Export-Import Bank of China and the Agricultural Development Bank of China.
Another 106.02 billion yuan was lent to financial institutions through the standing lending facility to meet provisional liquidity demand.
The central bank has adopted open market operations more frequently to manage liquidity in a more flexible and targeted manner.
The country will continue to implement a proactive fiscal policy and prudent monetary policy, according to the annual Central Economic Work Conference held in December 2019.