SHANGHAI (Reuters) – China’s central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged for a second month on Monday, matching market expectations.
The People’s Bank of China (PBOC) said it was keeping the rate on 500 billion yuan ($69.55 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75% from the previous operation.
With the same amount of such loans maturing on Monday, the operation resulted in no injection or withdrawal of medium-term liquidity on a net basis from the banking system.
Previously, the PBOC drained a net 200 billion yuan each in August and September.
In a poll of 27 market watchers conducted last week, all respondents forecast no change to the MLF rate, with the vast majority of them expecting a partial rollover.
The central bank also injected 2 billion yuan through seven-day reverse repos while keeping the borrowing cost unchanged at 2.00%, it said in an online statement.
The PBOC surprised markets in August by lowering both rates by 10 basis points to revive credit demand and support an economy hurt by COVID-19 shocks.
($1 = 7.1895 )