SHANGHAI/SINGAPORE – China’s central bank extended maturing medium-term policy loans and kept interest rates unchanged on Monday, in line with market expectations.
The People’s Bank of China (PBOC) said it would maintain the rate of 103 billion yuan ($14.43 billion) on one-year medium-term loans (MLFs) for some institutions. without changes in 2.65 percent with respect to the previous operation.
In a Reuters poll of 30 market watchers last week, all participants forecast no change in the MLF rate and the vast majority expected fund offerings to exceed expiration.
With 100 billion yuan in MLF loans due this month, the operation resulted in a net injection of 3 billion yuan of fresh funds into the banking system.
The central bank also injected 33 billion yuan through seven-day reverse repos, keeping borrowing costs unchanged at 1.9 percent, it said in an online statement.
China’s central bank cut key policy rates in June to prop up the cooling economy.
($1 = 7.1403 Chinese yuan)
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