China to conduct 400-bln-yuan MLF operation on Friday

China's central bank on Thursday announced that it will conduct a 400-billion-yuan (about 56.03 billion U.S. dollars), one-year medium-term lending facility (MLF) operation on Friday to maintain ample liquidity in the country's banking system.

The People's Bank of China said the MLF operation will be conducted using a fixed-quantity, interest-rate-bidding and multiple-price-bidding method.

With 300 billion yuan of MLF funds maturing in July, the net injection via MLF alone will reach 100 billion yuan this month.

"The move demonstrates policy continuity and would help stabilize market expectations," said Wang Qing, chief macro analyst at Golden Credit Rating.

He believes that with liquidity maintained at an ample level in the first half of the year, China's monetary policy will continue a supportive stance in the second half.

The MLF was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.