The results of the Mid Term Lending Facility (MLF) operation in April have been released. On April 15th, the People's Bank of China launched a 2 billion yuan open market reverse repurchase operation and a 100 billion yuan medium-term lending facility (MLF) operation, with interest rates remaining unchanged at 1.80% and 2.50%. This is the second consecutive month of the central bank's reduction in MLF, while the one-year MLF rate, which serves as the medium-term policy rate, has remained unchanged for eight consecutive months. Due to the expiration of 170 billion yuan of MLF on April 17th, this month's MLF has achieved a continuation of reduced parity. Experts say that there was not much disturbance in the funding situation in April, and the overall situation remained neutral and loose. The central bank continued to reduce its volume and continue to do MLF, with a net withdrawal of 70 billion yuan, which will help achieve market supply and demand balance. Wang Qing, Chief Macro Analyst of Dongfang Jincheng, believes that the MLF operating interest rate remained unchanged in April, which is in line with market expectations. Against the backdrop of the comprehensive implementation of reserve requirement cuts in February, a significant reduction in LPR quotes for more than 5 years, and a continued upward trend in the economy in the first quarter, the urgency of implementing policy based interest rate cuts is not high. This MLF scaling operation did not release any policy contraction signals. "April is a traditional credit month, and the pressure of credit supply on excess reserves has been alleviated. At the same time, considering the slow process of government bond issuance this year and the peak maturity of RMB 1.47 trillion in April, it is expected that government bond issuance will have limited pumping effect on capital." Wen Bin, Chief Economist of China Minsheng Bank, analyzed that overall, liquidity is stable and loose at present. As of April 12th, a total of RMB 18 billion has been invested in reverse repurchase this month, with a maturity of RMB 856 billion and a net withdrawal of RMB 838 billion. Therefore, the continued contraction of MLF in April is in line with the recent operational direction of the central bank. Due to the fact that the MLF interest rate is the anchor for pricing the loan market quoted rate (LPR), analysts expect the LPR interest rate to remain stable this month, while the MLF operating rate remains unchanged. However, considering the current and future low price levels and the need for improvement in economic growth momentum, lowering the MLF operating interest rate remains one of the important policy options in the future. "At present, the domestic effective demand is insufficient, the price level is below the trend level, and the prospects for external demand are complex. Further recovery of the domestic economy requires more active fiscal and monetary policy support. Total amount tools such as reserve requirement cuts and interest rate cuts are still commonly used to effectively improve the financing environment of the real economy, stimulate consumption and investment, and there is sufficient space for corresponding policy tools," said Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank. Wang Qing stated that there is a high possibility that the central bank will lower the MLF interest rate around the middle of the year. A clear signal that can release the power of stable growth policies can help promote consumption, expand investment, improve social expectations, and promote a mild rebound in price levels; Secondly, it can drive the linkage adjustment of LPR quotations, effectively reduce the financing costs of the real economy, and a low interest rate environment will also provide more favorable conditions for resolving local debt risks. (Lai Xin She)