The People's Bank of China increased the amount of MLF (Medium-term Lending Facility) operations, analysts believe that this will help dispel concerns in the market about tightening liquidity.

The People's Bank of China announced on March 24 that in order to maintain the ample liquidity of the banking system, it will conduct a 500 billion yuan MLF operation on March 25 with a fixed quantity, interest rate tender, and multiple price bidding method, with a term of 1 year. This operation is an additional increase to achieve a net injection of 50 billion yuan. Dong Ximiao, chief economist of the Zhonglian Financial Group, stated that after two consecutive reductions in the volume of buy-back reverse repurchase operations in March, this MLF operation with an additional increase sends a clear signal and helps dispel concerns in the market about possible tightening of liquidity.