China c.bank renews medium-term policy loans, rate unchanged for 4th month

China's central bank rolled over maturing medium-term policy loans while keeping a interest rate unchanged for the fourth straight month on Thursday, largely matching market expectations.

China's central bank rolled over maturing medium-term policy loans while keeping a interest rate unchanged for the fourth straight month on Thursday, largely matching market expectations. The People's Bank of China (PBOC) said it was keeping the rate on 650 billion yuan ($93.53 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75% from the previous operation.

In a poll of 24 market watchers conducted this week, 20 participants predicted the PBOC would keep the interest rate on the one-year MLF unchanged. The remaining four respondents expected a marginal rate cut. With 500 billion yuan worth of MLF loans set to expire on the same day, the operation resulted in a net 150 billion yuan fresh fund injection into the banking system.

The central bank also injected 2 billion yuan through seven-day reverse repos while keeping borrowing costs unchanged at 2.00%, it said in an online statement. The PBOC cut the amount of cash banks must set aside as reserves earlier this month to support an economy hurt by COVID-19 shocks. ($1 = 6.9498 Chinese yuan)