Where Does Medium-term Lending Facility Funding Flow?Evidence from China
Currently,the medium-term lending facility(MLF)has become a crucial channel for the central bank to inject base money into the economy,exerting a significant influence on the national economic landscape.This paper examines the impact of MLF interest rates on corporate financing costs and conducts a comprehensive analysis,including heterogeneity analyses across pri-mary industries and secondary manufacturing industries,to trace the flow of MLF funds.The study finds that MLF interest rates significantly and positively affect corporate financing costs,with in-terbank lending rates serving as an influential channel.Additionally,the distribution of MLF funds exhibits selectivity,primarily favoring the secondary industry and emerging frontier industries,with less selectivity observed within the manufacturing sector.These findings contribute to a deeper un-derstanding of the effects of lending facility monetary policy.
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