The People's Bank of China cut the interest rate on medium-term funding for financial institutions to the lowest level on record today. The bank lowered the rate of 100 billion yuan (US$14.2 billion) worth of one-year medium-term lending facility to financial institutions to 2.95 percent, from 3.15 percent, down by 20 basis points, Xinhua reports. The MLF tool was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral. Reuters, said this could pave the way for a similar reduction to the benchmark loan prime rate (LPR), which will be announced on the 20th, to lower financing costs for companies hit by pandemic.

Source: The Standard April 15, 2020 02:26 UTC