SHANGHAI, July 25 Reuters China39;s central bank surprised markets for a second time this week by conducting an unscheduled lending operation on Thursday at steeply lower rates, suggesting authorities are trying to provide heavier monetary stimulus to prop up the economy.

The mediumterm lending facility MLF operation comes after the central bank cut several benchmark lending rates on Monday, just days after a top leadership meeting, which had outlined other major reforms.

The People39;s Bank of China PBOC issued 200 billion yuan 27.5 billion in oneyear loans under its MLF at 2.30, down 20 basis points from its previous MLF loan, the bank said in a statement.

The central bank also injected 235.1 billion yuan into markets through sevenday reverse repos at 1.70 and said the cash injection through the shortterm instrument was to maintain reasonably ample monthend banking system liquidity conditions, according to the statement.

The MLF rate cut was basically a reaction to the sharp declines in the stock market, said Xing Zhaopeng, senior China strategist at ANZ. China39;s benchmark indexes have been falling this week.

China39;s stock markets reacted negatively to the news on Thursday, taking the sudden urgency on the part of authorities to lend to mean the deflationary pressures and weakness in consumer demand are more severe than what is priced into assets. China reported weakerthanexpected GDP data earlier this month.

The Hang Seng China Enterprises index in Hong Kong,…