China to conduct 500-bln-yuan MLF operation to sustain banking liquidity
Published: July 26, 2026
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Last verified: Jul 26, 2026 · Report an issue
Executive Summary
The People's Bank of China (PBOC) announced a 500 billion yuan (about $73.6 billion) one-year Medium-term Lending Facility (MLF) operation to maintain ample liquidity in the banking system. The operation uses variable-rate tenders with fixed quantity and a multiple-price auction. With 400 billion yuan maturing this month, the net injection is 100 billion yuan, supporting bank lending and economic stability.
Key Points
The PBOC will conduct a 500 billion yuan one-year MLF operation on July 24, 2026, to ensure ample banking system liquidity.
The auction method is variable-rate tenders with fixed quantity and multiple-price auction, allowing market-driven pricing.
After accounting for 400 billion yuan in maturing MLF this month, the net liquidity injection is 100 billion yuan.
This operation aims to stabilize short-term interest rates and support bank lending to the real economy.
MLF is a key tool for the PBOC to manage medium-term liquidity and guide market expectations.
The move signals continued accommodative monetary policy to sustain economic recovery amid global uncertainties.
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