PBC Presents Highlights of China Monetary Policy in 1Q
OREANDA-NEWS. June 05, 2013. On January 18, the PBC announced the launch of the Short-term Liquidity Operations (SLO) as a supplement to open market operations, to be used on a discretionary basis to manage the temporary fluctuations of liquidity in the banking system.
In January, the PBC launched the Standing Lending Facility (SLF) as an instrument to provide liquidity support to financial institutions.
On January 22, the PBC issued the Notice on Strengthening Liquidity Management of Local Financial Institutions with Legal Person Status and Enabling Central bank Short-term Lending to Play a greater Role in Supplying Liquidity (PBC Document  No. 22). In accordance with the Notice, PBC branch offices should attach great importance to the positive role of central bank lending in providing temporary liquidity support to local financial institutions with legal person status, guide local financial institutions to use the central bank short-term lending as a conventional financing source to solve short-term liquidity shortages, and make full use of the central bank short-term lending to meet the reasonable demand of financial institutions for liquidity.
On January 25, the PBC and the Bank of China Taipei Branch signed an agreement on RMB clearing business. According to the clearing agreement, financial institutions on each side of the Taiwan Straits can settle the cross-border RMB transactions for their clients either via an agent bank or the RMB clearing bank.
On January 30, the PBC reported to the Finance and Economy Committee of the National People’s Congress on the conduct of monetary policy in 2012.
On February 6, the China Monetary Policy Report for Q4 2012 was released.
On February 7, the General Administration Department of the PBC issued the Opinions on Strengthening the Credit Policy Work for 2013 (PBC General Administration Department Document  No. 26), urging PBC branch offices and banking financial institutions to enhance financial services to the agricultural sector, rural areas, and farmers, SMEs, urbanization projects, adjustment of economic structure and industrial upgrading, government-subsidized housing projects, employment and other livelihood projects, as well as the clearing-up and regulation of local government financing vehicles.
On February 8, in accordance with relevant arrangements on strengthening bilateral cooperation in financial services between the PBC and the Monetary Authority of Singapore, the PBC, after a comprehensive review, authorized the Industrial and Commercial Bank of China (ICBC) Singapore Branch to act as the clearing bank for RMB business in Singapore.
On March 4, the PBC issued the Notice on Expanding Recipient Eligibility of Central Bank Agro-linked Loans and Enhancing Financial Services to Spring Farming Activities (PBC Document  No.58). According to the Notice, the eligible recipients of central bank agro-loans would be expanded nationwide to guide rural financial institutions to step up credit support to the agricultural sector, rural areas, and farmers, and to make preparations for extending financial services to the spring farming activities.
On March 7, authorized by the State Council, the People’s Bank of China renewed the bilateral currency swap arrangement with the Monetary Authority of Singapore. The size of the swap facility was doubled from 150 billion yuan, or SGD 30 billion to 300 billion yuan, or SGD 60 billion. The agreement will be effective for three years, and can be extended by mutual consent.
On March 13, the PBC issued the Notice on Issues Related to Investment in the Interbank Bond Market by Qualified Foreign Institutional Investors (PBC Document  No. 69), allowing QFIIs to apply to invest in the interbank bond market.
On March 25, to implement the No. 1 Document of the General Office of CPC Central Committee on accelerating the development of a modern agricultural sector, the PBC issued the Guidance on Encouraging Financial Innovation to Accelerate the Development of a Modern Agricultural Sector (PBC Document  No.78), urging all banking financial institutions to speed up financial innovation to meet the reasonable financing demand in the development of a modern agricultural sector, in particular that of new operating entities such as large specialized farming households, family farms, farmers’ cooperatives, and to upgrade financial services to the agricultural sector, rural areas, and farmers.
On March 25, authorized by the State Council, the People’s Bank of China signed a bilateral local currency swap agreement with Banco Central do Brasil (BCB). The size of the swap facility is 190 billion yuan or 60 billion real. The agreement is valid for three years and can be extended by mutual consent.
On March 26, the PBC and South African Reserve Bank signed an agreement for the latter to invest in China’s inter-bank bond market via the PBC.