People's Bank of China Cuts TMLF Rate by 20bp... 56.1 Billion Yuan Liquidity Injection (Update)

[Asia Economy Beijing=Special Correspondent Park Sun-mi] The People's Bank of China has cut the interest rate of the 'Targeted Medium-term Lending Facility (TMLF)' by 20 basis points to alleviate the financial burden on small and medium-sized enterprises (SMEs) struggling with liquidity issues.

On the 24th, the People's Bank of China announced that it lowered the one-year TMLF interest rate from 3.15% to 2.95%. The central bank stated that it supplied liquidity amounting to 56.1 billion yuan at the reduced rate. This liquidity provision was made amid a TMLF maturity of 267.4 billion yuan on the same day.

The TMLF is a tailored financial support tool that has been actively implemented since last year, aimed at providing large-scale liquidity to commercial banks to promote lending to SMEs.

China continues to expand market liquidity supply and reduce financing costs to minimize the economic impact caused by COVID-19.

After announcing the worst-ever first-quarter economic growth rate of -6.8%, China also cut the Loan Prime Rate (LPR), which effectively serves as the benchmark interest rate, on the 20th. The one-year LPR was lowered by 0.2 percentage points to 3.85%, and the five-year LPR, which affects mortgage loans, was reduced by 0.1 percentage points from 4.75% to 4.65%.

This content was produced with the assistance of AI translation services.