此外，值得关注的是，MLF改为美式招标，不再有统一的中标利率，标志着MLF利率的政策属性完全退出。“历史上MLF利率曾发挥中期政策利率的作用，但也存在政策利率较多、关系复杂等问题。”有业内人士对《金融时报》记者解释，为进一步推动利率市场化改革，央行行长潘功胜在2024年“6·19”陆家嘴论坛讲话中明确，央行主要政策利率是公开市场7天期逆回购操作利率，并要逐步淡化其他期限工具利率的政策色彩。本次MLF操作改为多重价位中标，不再有统一的中标利率，实现了MLF利率政策属性的完全淡出，也标志着潘行长“6·19”讲话中对政策利率体系的调整进入实质阶段。On March 24, the central bank announced on its official website that it would conduct a 450 billion yuan Medium-term Lending Facility (MLF) operation, and starting this month, the MLF operation will be adjusted from a single price bidding to multiple price bidding (i.e., American-style bidding).
On March 24, the central bank's official website announced that it would carry out a medium-term lending facility (MLF) operation of 450 billion yuan, and starting this month, the MLF operation will change from a single-price bidding to multiple-price bidding (i.e., American-style bidding).
"The MLF operation has once again resulted in a net injection, demonstrating a moderately loose monetary policy orientation." An industry expert explained to reporters from the Financial Times that this month, 387 billion yuan of MLF matured, achieving a net injection of 63 billion yuan, marking the first net injection of MLF since July 2024. Since the central bank initiated the reverse repos with buyout in October last year, the balance of the buyout reverse repos has gradually increased, alleviating the pressure of MLF injections on medium to long-term liquidity, with the MLF balance dropping from a peak of 7.3 trillion yuan to about 4 trillion yuan. This year, the central bank has continued to inject liquidity using various tools, with a net injection exceeding 1.3 trillion yuan from buyout reverse repos and MLF combined in January and February, maintaining abundant liquidity and stable operation of money market interest rates.
Moreover, it is noteworthy that the MLF has changed to American-style bidding, no longer having a unified bidding interest rate, which signifies that the policy attribute of the MLF interest rate has completely exited. "Historically, the MLF interest rate played the role of a medium-term policy rate, but there were also issues with many policy rates and complex relations," explained an industry insider to reporters from the Financial Times. To further promote interest rate marketization reform, the central bank governor Pan Gongsheng stated during the 2024 '6•19' Shanghai Lujiazui Finance & Trade Zone Development Forum that the central bank's main policy interest rate is the 7-day reverse repo operation rate, and the focus will gradually shift away from the policy attributes of interest rates of other term tools. The adjustment to the MLF operation to multiple price bidding, with no unified bidding interest rate, has achieved a complete exit of the policy attributes of the MLF interest rate, marking the substantial stage of the adjustment of the policy rate system mentioned by Governor Pan during the '6•19' speech.
In the view of several respondents, the gradual exit of the MLF policy interest rate is carefully designed by the central bank, with the results coming naturally. Reporters from the Financial Times have noted that the exit of the MLF policy interest rate attributes has adopted a gradual approach: First, since July last year, the timing of MLF operations has been unified to follow the LPR quoting, thereby realizing the 'decoupling' of LPR and MLF interest rates. Second, in July, it was also clarified that the MLF operations would adopt interest rate bidding, and from the monthly MLF announcements, it can be seen that the bidding interest rates from participating institutions varied, with the width of the range gradually expanding, enhancing institutions' pricing capabilities. Third, in October last year, the buyout reverse repo tool was activated, utilizing a multiple price bidding approach (American-style bidding). The sustained operations over the past six months have accumulated experience, making market institutions familiar with it, leading naturally to its promotion in MLF operations.
"The MLF’s return to its role as a liquidity injection tool, together with other term tools, constitutes the central bank’s liquidity tool system," an industry expert analyzed. After the policy interest rate attributes exit, the MLF's tool positioning is clearer, focusing on providing 1-year liquidity. Currently, the central bank's liquidity toolbox is rich, with a more reasonable distribution of terms. Long-term tools include reserve requirement cuts and government bond trading; medium-term tools are MLF, buyout reverse repos, and various structural tools; short-term tools include 7-day reverse repos and temporary overnight repos. In the future, the central bank's liquidity management will be more efficient and precise, with scientific and flexible control intensity and rhythm, better balancing multiple objectives.
Industry experts expect that after adopting multiple price bidding, the funding cost of MLF will generally decrease, alleviating the pressure on banks' net interest margins. Institutions typically reference market-based financing costs for MLF bidding; currently, the one-year interbank certificate of deposit rate for national commercial banks is around 1.95%, while rates for other small and medium-sized banks may be higher. The use of multiple price bidding can better reflect institutions' differentiated funding needs and enhance their market-driven pricing capability. According to insiders close to the central bank, this move is beneficial for lowering banks' funding costs, alleviating pressure on net interest margins, and enhancing the sustainability of financial support for the real economy.
This article is reproduced from the "Financial Times" WeChat public account, edited by Zhichun Finance: Chen Xiaoyi.
