Mubasher: The People’s Bank of China (PBoC) provided 200 billion Chinese yuan (CNY) ($28.49 billion) through its medium-term lending facility (MLF) on Friday, while it maintained the lending rate, CNBC reported.

The move came as a surprise for market participants, as the central bank already added to long-term funds last week.

The central bank extended CNY 400 billion yuan into financial institutions through the liquidity tool.

The PBoC’s cash injection could probably be a response to tighter liquidity in the interbank market from late Thursday, which resulted in higher borrowing costs, according to CNBC.

The move through MLF loans was to address the liquidity shortage, even after many cuts to reserve requirement ratio (RRR), Shanghai-based Hwabao Trust economist Nie Wen was cited by the news outlet.

However, “at least it has to release liquidity to support economic growth, especially after October’s sluggish credit lending data,” Nie said.

On a side note, the PBoC held the interest rate on the one-year rate at which it lends to banks via its medium-term facility at 3.25%, unchanged as the prior operation.

This came after the central bank cut the interest rate on one-year MLF loans from 3.30%, for the first time since the rate it was introduced in 2016.