China central bank rolls over medium-term policy loans, rate unchanged

CHINA’S central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged on Monday (Jul 17), matching market expectations.

The People’s Bank of China (PBOC) said it was keeping the rate on 103 billion yuan (S$19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.65 per cent from the previous operation.

In a Reuters poll of 30 market watchers conducted last week, all participants predicted no change to the MLF rate, and vast majority of them expected fund offerings to exceed maturity.

With 100 billion yuan worth of MLF loans set to expire this month, the operation resulted a net 3 billion yuan fresh fund injection into the banking system.

The central bank also injected 33 billion yuan through seven-day reverse repos while keeping borrowing costs unchanged at 1.90 per cent, it said in an online statement.

China’s central bank lowered key policy rates in June to prop up the cooling economy. REUTERS