(Yicai) Oct. 28 -- The People’s Bank of China has injected a net CNY200 billion (USD28.2 billion) into the banking system through its medium-term lending facility this month, marking the eighth straight month of expanded MLF operations and maintaining a generally accommodative monetary policy.

The PBOC tendered CNY900 billion (USD126.8 billion) of one-year MLF loans yesterday to offset CNY700 billion maturing this month, according to the central bank’s announcement. The resulting net injection was slightly lower than the CNY300 billion seen last month and in August.

The PBOC also conducted outright reverse repurchase operations on Oct. 9 and 15, amounting to CNY1.1 trillion (USD154.9 billion) and CNY600 billion, respectively, to counterbalance the CNY1.3 trillion that was maturing in October. This resulted in a net liquidity injection of CNY400 billion.

The MLF and outright reverse repos combined add up to a total liquidity injection of CNY600 billion this month.

By continuing to inject medium-term liquidity into the market, the central bank demonstrates the coordination between monetary and fiscal policies, supporting smooth government bond issuance while better meeting the credit and financing needs of businesses and households, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International

Although the peak period for local government bond issuance has passed this year, the finance ministry recently allocated an additional CNY500 billion (USD70.4 billion) in bond sale quotas to address existing debt and expand effective investment. Net financing from government bonds is expected to reach CNY1 trillion this month, according to Wen Bin, chief economist at China Minsheng Bank.

Looking at this quarter, China's monetary policy is likely to maintain a moderately accommodative stance, according to analysts.

The US Federal Reserve’s 25-basis-point rate cut in mid-October provides a favorable external environment for China’s more accommodative monetary policy, according to Ming Ming, chief economist at Citic Securities.

Given the continued weakness in domestic credit demand and the real estate market, as well as the uncertainty surrounding external tariffs, it is expected that the PBOC will use more monetary easing tools in the future, Ming added.

Editors: Dou Shicong, Tom Litting