China Raises Interest Rates on Open Market Operations, Standing Lending Facility

By Wu Hongyuran and Dong Tongjian

(Beijing) — China’s central bank has surprised the financial markets by raising interest rates on its open market operations and its standing lending facility (SLF) in its latest attempt to reduce financial leverage in the market.

On Friday, the People’s Bank of China raised the overnight interest rate on its SLF liquidity management tool to 3.1% from 2.75%. The seven-day rate was increased to 3.35% from 3.25%, and the 30-day rate was hiked to 3.7% from 3.6%, sources close to the central bank told Caixin.

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