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cailianshe news, september 25 (reporter cao yunyi)today, in order to maintain a reasonable level of liquidity in the banking system, the people's bank of china carried out a 300 billion yuan medium-term lending facility (mlf) operation with a term of one year, a maximum bid rate of 2.30%, a minimum bid rate of 1.90%, and a winning bid rate of 2.00%. after the operation, the balance of the medium-term lending facility was 687.8 billion yuan.

the mlf interest rate has declined as expected, and the incremental financial support policy has been effective. just now, the "medium-term lending facility" column of the central bank's official website released an announcement, announcing that it would carry out a 1-year mlf operation of 300 billion yuan that day, with a winning rate of 2.0%, down 0.3 percentage points from the previous month. this is the first downward market-based interest rate after the central bank's governor pan gongsheng announced at a press conference yesterday that he would lower the reserve requirement ratio and interest rates in the near future.

market experts told cailianshe reporters that this reflects the guiding role of the central bank's reduction of the policy interest rate (the 7-day reverse repurchase operation rate in the open market) on market-based interest rates. the decline in the mlf interest rate will help save bank funding costs. through the transmission of internal pricing in banks, it is expected that lpr and deposit rates will also decline, which will continue to boost market confidence and support stable economic growth.

in addition, the mlf was renewed in reduced amount and coordinated with the rrr cut, which is to maintain a reasonable liquidity. the mlf operation volume in september was 291 billion yuan less than the maturity volume, mainly because the long-term liquidity gap of the banking system was greatly narrowed after the central bank announced yesterday that it would cut the rrr by 0.5 percentage points in the near future and release 1 trillion yuan of long-term funds. the necessity for the central bank to continue to renew the mlf in equal amounts has decreased. at the same time, the central bank also revealed yesterday that it may cut the rrr by another 0.25~0.5 percentage points before the end of the year. the industry expects that it will also reasonably hedge the mlf maturity in the fourth quarter and keep the market funds stable.

it is worth noting that the central bank announced the mlf bidding price for the first time, and the transparency of the operation has been further improved. the reporter noted that since july, the central bank has clearly stated in the announcement that the mlf operation adopts a fixed quantity and interest rate bidding method, and the winning rate will be flexibly determined based on the institutional bids. this month, the central bank announced the mlf bidding rate for the first time. the highest institutional bidding rate was 2.3% and the lowest was 1.9%, reflecting the differences in the medium- and long-term funding needs of different institutions. this is also in line with the "6.19" policy of governor pan gongsheng.lujiazui"this is consistent with the speech's mention of improving monetary policy transparency.

mlf is released separately from open market operations, and the differentiated positioning of the tools will be clearer in the future. market participants said that in the past, the results of mlf operations were released together with the reverse repurchase operations of the open market on the same day. this time, the mlf operation was "started from scratch" and released in advance under the column of re-loan-medium-term lending facility, which further reflects the difference with the 7-day reverse repurchase operation rate as a policy rate, and promotes mlf to return to the positioning of medium- and long-term liquidity supply tools.