PBoC accepts lower-grade and green bonds as collateral

pboc building
China is likely to manage liquidity via both MLF and RRR changes in the future, analysts say

The People’s Bank of China is expanding the list of eligible collateral in its medium-term lending facility (MLF), looking to boost liquidity for domestic firms amid the end-quarter seasonal liquidity tightening.

The PBoC will now accept lower-rated corporate bonds and green bonds as collateral in its liquidity operations. The MLF is one of the seven liquidity provisioning facilities in the central bank’s monetary policy toolkit.

Some observers believe the PBoC may delay a much-anticipated res

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