On the Impact of MLF Decline on Macroeconomy
Abstract
MLF is a monetary policy tool used by central banks to provide medium-term base money. Medium-term lending facility rate plays the role of medium-term policy interest rate, which influences the balance sheet of financial institutions and market expectations by adjusting the cost of medium-term financing to financial institutions. Since the implementation of MLF monetary policy tool in 2014, it has attracted great attention from all aspects. In January 2022, the MLF rate dropped 10 basis points from 2.95 percent to 2.85 percent. This paper analyzes the impact of MLF decline on the stock market, real economy and commercial banks.
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DOI: http://dx.doi.org/10.18686/fm.v7i6.7640
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