China central bank injects 700 billion yuan of MLF loans, rates steady for fourth month
SHANGHAI (Reuters) – China’s central bank on Monday rolled over maturing medium-term loans while keeping borrowing costs unchanged for the fourth straight month.
The People’s Bank of China (PBOC) said in a statement it was keeping the rate on 700 billion yuan ($100.74 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions steady at 2.95% from previous operations.
Analysts also expect no change for the country’s benchmark loan prime rate (LPR) on Thursday.
The fresh fund injection well exceeds two batches of MLF loans that are set to expire in August, with a total volume of 550 billion yuan.
The PBOC said in the statement that the rollover was a one-off MLF operation for the whole month to “fully meet market demand”.
It also said it injected another 50 billion yuan through seven-day reverse repos while also keeping the borrowing cost steady.
The MLF, one of the PBOC’s main tools in managing longer-term liquidity in the banking system, serves as a guide for the LPR, which is set monthly using assessments from 18 banks.
Reporting and photo: Reuters