China’s central bank on Thursday said it would cut interest rates for a monetary instrument called the Standing Lending Facility, or SLF, in an effort to guide market rates.
In a brief statement on its Twitter-like Weibo account, it said it would cut the overnight SLF lending rate to 2.75% from 4.5% and would lower the seven-day rate to 3.25% from 5.5%. The cuts will be effective on Friday, it said.
The Chinese central bank launched the SLF trial in 2013 in a bid to meet liquidity demand from commercial lenders and pass on the credits to corporate borrowers.
At the end of October, the outstanding SLF was zero, official data showed.