China's central bank extends MLF

China's central bank has extended the term of a due medium-term lending facility (MLF) valuing 269.5 billion yuan (43.99 billion U.S. dollars) and added another 50 billion yuan.

The move was made to stabilize the market using stimulus and guidance of MLF in anticipation of the upcoming Spring Festival, which usually causes a seasonal liquidity fluctuation, the People's Bank of China (PBOC) said during an announcement Wednesday.

The MLF operation targets joint-stock commercial banks, city commercial banks and rural commercial banks, with a term of three months and an interest rate of 3.5 percent, according to the PBOC.

The PBOC implemented new tools last year to tackle the changing economic landscape, including MLF and pledged supplementary lending (PSL).

The new tools are more flexible and targeted to ensure sufficient liquidity, support reasonable credit growth and facilitate structural adjustment, the central bank explained.

On Jan. 9, PBOC announced it will continue with prudent monetary policies in 2015 with better coordination of tight and loose monetary measures and proper fine-tuning.