China central bank injects $60.2 billion of liquidity in February, down sharply from January

China's central bank injected 413.85 billion yuan ($60.2 billion) via short- and medium-term liquidity tools in February, down 35 percent from the previous month, signalling a bid to rein in rapid credit growth. That followed a 26 percent drop in January from December. Under its new "prudent and neutral" policy, the People's Bank of China (PBOC) has adopted a modest tightening bias in a bid to cool explosive growth in debt, though it is treading cautiously to avoid hurting economic growth. The central bank raised interest rates on its reverse repurchase agreements (repos) and the SLF on Feb. 3, following a rise in rates on the MLF in late January.
The PBOC lent 393.50 bln yuan to financial institutions via its medium-term lending facility (MLF) in February, it said on its website on Wednesday.
Of the total, the central bank lent 150 billion yuan for six months and 243.5 billion yuan for one year.
Outstanding MLF loans totalled 3.761 trillion yuan at the end of February, compared with 3.573 trillion yuan at the end of January, implying a net injection of 188.5 billion yuan.
The central bank also extended 20.35 billion yuan of loans to local financial institutions in February via its standing lending facility (SLF). Outstanding SLF loans were at 14.92 billion yuan at the end of February, compared with 34.51 billion yuan at the end of January, implying a net drain of 19.59 billion yuan.-Reuters