The reduction followed a similar five basis point rate cut in January, according to anonymous sources. However, it is not known what proportion of the 600 billion yuan ($88.4 billion) of MLF loans made this month were made at the lowest rate. The People’s Bank of China has stopped publishing loan pricing data since March 2025 after it changed the method of calculating them and allowed banks to participate in tenders where they can pay different rates.
In its latest quarterly report, the People’s Bank of China reiterated its intention to maintain a “moderately accommodative” monetary policy and provide sufficient liquidity to stimulate growth, despite concerns about imported inflation.
According to Bloomberg calculations, the central bank made a net injection of 100 billion yuan into the banking system through the MLF mechanism in May, making up for net withdrawals in April. It also increased the amount of funds offered in daily open market operations at the end of the month.
