(Yicai Global) June 6 -- The People's Bank of China has conducted CNY10 billion (USD1.5 billion) of reverse repo operations and CNY500 billion of medium-lending facility loans today. The central bank also conducted an additional CNY37 billion of MLF loans for small and medium-sized banks after renewing CNY463 billion-worth of MLF loans which will mature today. 

The PBOC made the move to offset the maturing loans, as well as CNY30 billion of reverse repos and the payment for government bond issuance, according to a statement. 

It injected CNY17 billion into the market as the central bank also conducted CNY10 billion worth of reverse repo operations.  

Interest rates for the CNY10 billion of seven-day reverse repos and the CNY500 billion of one-year MLF loans stood at 2.55 percent and 3.3 percent, respectively, which are the same as before. 

Significant reductions in overseas interest rates in May and renewed expectations of easy money and rate cuts provided PBOC with an environment to appropriately incline its monetary policy towards "stabilizing economic fundamentals," said Li Qilin, chief economist at Lianxun Securities. 

Replacing the reserve requirement ratio reduction with excessive and high-cost MLF operations is a moderate choice under multi-objective requirements, he said, adding that inflation uncertainties and the need for structural deleveraging should be the key reason for the CNY500 billion MLF operation. 

Based on this, the RRR is not likely to be cut in June, Li added. 

The PBOC has been injecting liquidity this week. The central bank conducted CNY210 billion of reverse repos in total as well as CNY500 billion of MLFs, during which CNY530 billion of reverse repos and CNY463 billion of MLF loans have matured, according to data from Wind. Therefore, the PBOC's open market operation involved the withdrawal of CNY283 billion net this week. 

The move followed the China Banking and Insurance Regulatory Commission's decision to take over Baoshang Bank for a year on May 24 due to a serious credit crisis, sparking heated discussion in the financial market. 

Editor: Liao Shumin