PBOC MLF liquidity injection today – unchanged rate expected (but some expect a small cut)

  • 700 billion yuan of this medium-term lending debt is maturing.
  • according to Reuters polling 12 analysts expect the PBOC rollover the 700 billion yuan, 10 expect and lend a greater amount, while 3 expect an only partial rollover
  • 21 of the surveyed analysts expect the MLF interest rate to stay unchanged at 2.75%, 4 expect a 10bp rate cut

The rate on the MLF will give us a clue to LPR rates to be set on Friday. A cut would likely indicate a move lower on one or both of the LPRs. Unchanged suggests the LPRs will remain at an unchanged rate. Current LPRs are:

  • 3.65% for the one year
  • 4.30% for the five year
pboc mlf rate graph 16 January 2023
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