China central bank leaves key policy rate unchanged, as expected

CHINA’S’ central bank on Friday left a key policy rate unchanged as expected when rolling over maturing medium-term loans.

The People’s Bank of China (PBOC) said it was keeping the rate on 387 billion yuan (S$72 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50 per cent from the previous operation.

In a Reuters poll of 36 market watchers, 32, or 89 per cent, of all respondents, expected the central bank to keep the borrowing cost of the one-year MLF loans unchanged.

With 481 billion yuan worth of MLF loans set to expire this month, the operation resulted in a net 94 billion yuan fund withdrawal from the banking system.

The central bank also injected 13 billion yuan through seven-day reverse repos while keeping the borrowing cost unchanged at 1.80 per cent, it said in a statement. AFP