SHANGHAI/SINGAPORE – China’s central bank ramped up liquidity injection when rolling over maturing medium-term policy loans for the fifth consecutive month on Monday, while keeping interest rate unchanged, matching market expectations.
The People’s Bank of China (PBOC) said it was keeping the rate on 170 billion yuan ($24.75 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75 percent from the previous operation.
In a Reuters poll of 29 market watchers conducted last week, all participants expected no change to the MLF rate, while 23 forecast fund offerings would exceed maturity.
With 150 billion yuan worth of MLF loans set to expire this month, the operation resulted a net 20 billion yuan fresh fund injection into the banking system.
The central bank also injected 20 billion yuan through seven-day reverse repos while keeping the borrowing cost unchanged at 2 percent, it said in an online statement.
($1 = 6.8690 Chinese yuan renminbi)
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