The People's Bank of China (PBOC) cut the interest rate of its medium-term lending facility (MLF) loans by 10 basis points to mitigate the impact of the COVID-19 outbreak on its economy.

China's central bank lowered the rate of 200 billion yuan (about 28.65 billion U.S. dollars) worth of one-year MLF to financial institutions to 3.15 percent, compared with 3.25 percent on the previous operation.

The central bank also injected 100 billion yuan of funds into the market via 7-day reverse repos Monday, when a trillion yuan of reverse repos matured.

The Vice President of the PBOC, Fan Yi Fei said on February 15 that the People's Bank of China would strive to improve market liquidity through implementation of different financial instruments to contain the outbreak of COVID-19.

On February 17, the chief analyst at China Minsheng Bank, Wen Bin, said that the central bank's move, which combines interest rate reduction with issuing of 7-day reverse repo, aims to delay the maturity date for financial investments and stabilize market expectations. According to Wen, the decrease in rate of MLF also foreshadows the decrease in Loan Prime Rate in the future.

(With input from Xinhua)