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China central bank injects 300b yuan via one-year medium-term loans, keeps rate unchanged

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China's central bank extended 300 billion yuan (S$57.97 billion) through its medium-term lending facility (MLF) on Friday, but kept the lending rate unchanged.

[SHANGHAI] China's central bank extended 300 billion yuan (S$57.97 billion) through its medium-term lending facility (MLF) on Friday, but kept the lending rate unchanged.

The People's Bank of China (PBOC) said on its website the interest rate on one-year MLF loans remained 3.25 per cent, the same as in the previous operations.

The injection of fresh funds exceeded a batch of 187.5 billion yuan worth of such one-year MLF loans due to maturity on the same day, injecting a net 112.5 billion yuan into the market.

Investors had been anxious to see if the PBOC would lower the MLF rate again this month following a marginal interest rate cut in November, though traders said they had not expected a rate reduction.

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The PBOC cut the interest rate on its one-year MLF loans by five basis points last month for the first time since early 2016, as policymakers work to prop up a slowing economy hit by weaker demand at home and abroad.

The PBOC also said in Friday's statement that it had skipped reverse repo operations on the day.

Another batch of 286 billion yuan worth of one-year MLF loans is set to expire on Dec 16.

The MLF rate is the price of loans that PBOC lends to commercial banks in the medium term.

REUTERS