China cuts medium-term lending rate for first time since 2016

SHANGHAI, Nov 5 (Reuters) - China’s central bank on Tuesday cut the interest rate on its medium-term lending facility (MLF) for the first time since early 2016.

The People’s Bank of China (PBOC) said on its website that it was lowering the rate on one-year MLF loans by 5 basis points (bps) to 3.25% from 3.30% previously.

The PBOC said it had injected 400 billion yuan ($56.92 billion) into financial institutions via the liquidity tool, slightly less than a batch of MLF loans worth 403.5 billion yuan due to mature on Tuesday.

The MLF rate acts as a guide for the PBOC’s new lending benchmark, the Loan Prime Rate (LPR).

China’s economic growth has slowed to near 30-year lows, weighed down by weak domestic and global demand and the prolonged Sino-U.S. trade war.

$1 = 7.0275 Chinese yuan renminbi Reporting by Andrew Galbraith