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

SHANGHAI/SINGAPORE  – China’s central bank rolled over maturing medium-term policy loans while keeping interest rates unchanged on Monday, matching market expectations.

The People’s Bank of China (PBOC) said it was keeping the rate on 125 billion yuan ($18.08 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75 percent from the previous operation.

In a Reuters poll of 30 market watchers conducted last week, 26 participants, or 86.7 percent, predicted no change to the MLF rate, while four respondents expected a marginal rate cut.

With 100 billion yuan worth of MLF loans set to expire this month, the operation resulted in a net 25 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 percent, it said in an online statement.

($1 = 6.9121 Chinese yuan)