SHANGHAI/SINGAPORE: China’s central bank on Monday left a key policy rate unchanged as expected when rolling over maturing medium-term loans and drained some cash from the banking system through the bond instrument.
The People’s Bank of China (PBOC) said it was keeping the rate on 100 billion yuan ($13.82 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50% from the previous operation.
In a Reuters poll of 31 market watchers, all respondents expected the PBOC to leave the interest rate on MLF rate unchanged.
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With 170 billion yuan worth of MLF loans set to expire this month, the operation resulted in a net 70 billion yuan of fresh fund withdrawals from the banking system.
The central bank also injected 2 billion yuan through seven-day reverse repos while keeping borrowing cost unchanged at 1.80%, it said in an online statement.
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