The People’s Bank of China (PBOC) said it kept the interest rate on 850 billion yuan ($120.21 billion) of one-year loans extended to certain financial institutions under the lending facility at 2.75 percent. medium term (MLF), interest rate unchanged from previous transaction.
In a poll this week of 31 market watchers, all participants expected the PBOC to keep interest rates unchanged, while 22 expected the central bank to roll over incoming borrowing in full.
As 1 trillion yuan of MLF loans matured on the same day, the operation resulted in a net withdrawal of 150 billion yuan of medium-term liquidity from the banking system.
The central bank also injected 172 billion yuan through seven-day reverse repos, while borrowing costs were kept unchanged at 2.00 percent, it said in an online statement.
The PBOC surprised markets in August by cutting both interest rates by 10 basis points to revive credit demand and support an economy hit by the shock of COVID-19.
($1 = 7.0710 Chinese Yuan)
