The PBOC is expected to increase the quota of its Medium-term Lending Facility (MLF) in February as it looks to ensure a stable economic rebound, China Securities News reported on Tuesday.

Additional takeaways

“The expectation of a higher MLF quota is strong, but PBOC policy will be influenced by factors such as the demand for physical credit, the speed of cash circulation, the rebalancing of deposits between institutions, and the effects of peak tax season in February.”

“The decline in market interest rates in recent days is mainly due to the central bank's increase in open market operations to meet institutional liquidity needs and stabilize market expectations.”