On August 25, the People's Bank of China (PBOC) conducted a one-year Medium-Term Lending Facility (MLF) operation worth 600 billion yuan. This month's net MLF injection amounted to 300 billion yuan, marking the sixth consecutive month of increased liquidity injection. The MLF serves as a pivotal monetary policy instrument for the central bank, enabling it to adjust the medium-term financing costs of financial institutions and steer the decline in social financing costs. By supplying medium-term base money, the MLF influences both the balance sheets and market expectations of financial institutions.
