China central bank cuts medium-term loan rate for first time since 2016 as growth cools

China’s central bank cut the interest rate on its medium-term lending facility (MLF) on Tuesday for the first time since early 2016, as policymakers work to prop up a slowing economy hit by weaker demand at home and abroad, reported Reuters.

The People’s Bank of China (PBoC) said on its website that it was lowering the rate on one-year MLF loans CNMLF1YRRP=PBOC by 5 basis points (bps) to 3.25% from 3.30% previously.

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

The PBoC’s decision to trim medium-term borrowing costs comes after it surprised markets by not issuing targeted medium-term loans in October, adding to uncertainty over how policymakers plan to stabilize the slowing economy.