China unexpectedly injects 502 bln yuan through 1-year MLF, rate unchanged

SHANGHAI, July 23 (Reuters) - China’s central bank said on Monday that it lent 502 billion yuan ($74.36 billion) to financial institutions via its one-year medium-term lending facility (MLF) with rates unchanged.

The move was unexpected by market participants as no MLF loans were due to mature on Monday. The central bank typically injects liquidity through MLF loans on the day existing loans are due to mature.

The interest rate for the one-year MLF was 3.30 percent, the People’s Bank of China (PBOC) said, unchanged from the previous one-year MLF injection.

The cash injection came after the central bank was reported to ensure ample liquidity by allowing commercial banks to tap its MLF loans, especially lenders that have invested in bonds rated AA+ and below, sources told Reuters last week.

The PBOC said in the same statement that it skipped reverse repos on the same day. 170 billion yuan worth of reverse repos is set to expire on Monday. ($1 = 6.7505 Chinese yuan) (Reporting by Winni Zhou and John Ruwitch; Editing by Sam Holmes)