China's Medium-term Lending Facility rate will be set today

<p>I posted on this earlier, but ICYMI, the monthly PBOC Medium-term Lending Facility (MLF) rate setting is coming up today, Wednesday, 15 November 2023:</p><ul><li>Due around 0115 GMT.</li><li>the MLF rate is currently 2.5%.</li></ul><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. Thart is, its a rate for the PBOC to provide medium-term liquidity to commercial banks.</p><ul><li>The rate is normally announced on the 15th of each month.</li><li>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.</li><li>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.</li></ul><p>I've seen basically no expectations of a rate change for this today.</p><p>The MLF rate sets the scene for the monthly Loan Prime Rate (LPR) setting on the 20th. Current LPRs:</p><ul><li>3.45% for the one year</li><li>4.20% for the five year</li></ul><p>Also from China today are economic activity data for October, I <a href="https://www.forexlive.com/news/asian-economic-calendar-key-events-and-consensus-expectations-for-15-november-2023-20231114/" target="_blank" rel="follow">posted on this earlier also</a>. </p>

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