The People's Bank of China (PBOC), the central bank, on November 1 said it made 763 billion yuan ($112.7 billion) available through medium-term lending facilities (MLF) to meet the cash demands of financial institutions last month, bringing total outstanding MLF loans to 2.1 trillion yuan ($310.18 billion).

Interest was set at 2.85 percent for six-month loans, and 3 percent for one-year loans.

Lenders were encouraged to increase financial support for small firms, agriculture and other money-starved sectors, according to the statement.

The MLF tool was first introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank, using securities as collateral.

The central bank has increasingly relied on open market operations to provide liquidity, rather than relying on cuts in interest rates or the reserve requirement ratio.

In addition to MLF, pledged supplementary lending (PSL) and standing lending facilities (SLF) were also used in October.

Liquidity injected through PSL to China Development Bank, Agricultural Development Bank of China and the Export-Import Bank of China stood at 51.1 billion yuan ($7.55 billion). Outstanding PSL loans amount to 1.98 trillion yuan ($292.45 billion).

Meanwhile, 712 million yuan ($105.16 million) was granted to financial institutions via SLF last month to meet provisional liquidity demand.

(Xinhua News Agency November 1, 2016)