PBOC Cuts Rates for Standing Lending Facility

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.

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.