Large commercial banks, joint-stock banks and major urban commercial banks that lend heavily to the real economy and meet macro prudent requirements can apply for the TMLF. Handout.

The People’s Bank of China on Wednesday injected 267.4 billion yuan (US$39.8 billion) of liquidity into the market via the targeted medium-term lending facility, according to an official statement.

The funds have maturity of up to three years and an annual interest rate of 3.15%, 15 basis points lower than the existing medium-term lending facility.

Large commercial banks, joint-stock banks and major urban commercial banks that lend heavily to the real economy and meet macro prudent requirements can apply for the TMLF, the PBoC said.

The TMLF tool was introduced in December 2018 to encourage loans for small and private businesses. This is the second time it was used since the beginning of this year.

An analyst was quoted as saying that TMLF is a proper method to resolve the structural financing problem of private companies, however it’s not equal to an interest rate cut.

Those who expect large scale easing measures may be disappointed, Beijing Youth Daily reported, citing an analyst.

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