Add this to the data agenda today – PBOC MLF announcement due 15 August 2023

<p>Coming up today is the monthly PBOC Medium-term Lending Facility (MLF). The MLF rate is currently 2.65%. Expectations for a cut to the rate are very low, but not zero. A cut is a low but non-negligible chance.</p><p>Due around 0115 GMT. </p><p>-</p><p>The MLF rate is a benchmark interest rate that banks in China can use to borrow funds from the People's Bank of China for a period of 6 months to 1 year, medium-term liquidity to commercial banks.</p><p>The rate is normally announced on the 15th of each month.</p><p>The interest rate on the MLF loans is typically higher than the benchmark lending rate (more on these below), which encourages banks to use the facility only when they face a shortage of funds.</p><p>The MLF rate sets the scene for the monthly Loan Prime Rate (LPR) setting on the 20th.Current LPRs:</p><ul><li>3.55% for the one year</li><li>4.20% for the five year</li></ul><p>MLF loans are secured by collateral, which can be a wide range of assets including bonds, stocks, and other financial instruments. The collateral ensures that the PBOC can recover the funds if the borrower defaults on the loan.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.