BEIJING — China's central bank on Feb 17 cut the interest rate of its medium-term lending facility (MLF) loans by 10 basis points amid the country's efforts to mitigate the impact of the novel coronavirus outbreak on its economy.

The People's Bank of China (PBOC) lowered the rate of 200 billion yuan (about $28.65 billion) worth of one-year MLF to financial institutions to 3.15 percent, compared with 3.25 percent on the previous operation.

No MLF loans were set to mature on Feb 17.

The central bank also added 100 billion yuan of funds into the market via 7-day reverse repos on Feb 17, when 1 trillion yuan of reverse repos matured.

The central bank's move, which was in line with market expectations, aimed to provide longer-term funds with market liquidity remaining sufficient, said Wen Bin, the chief analyst at China Minsheng Bank.

Wen said the move also paved the way for a reduction in the loan prime rate, which was due for release on Feb 20.

The central bank is likely to keep the monetary policy flexible and appropriate, and strengthen the counter-cyclical adjustment to effectively reduce the financing costs of the real economy, Wen said, adding that there was still room for the PBOC to lower the benchmark interest rates and reserve requirement ratios.

The MLF tool was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.