China’s Central Bank Maintains Key Policy Rate

China’s central bank, the People’s Bank of China (PBOC), adhered to expectations on Monday by leaving a key policy rate unchanged while rolling over maturing medium-term loans and implementing measures to withdraw liquidity from the banking system.

The PBOC announced that it would maintain the rate on 100 billion yuan ($13.82 billion) worth of one-year medium-term lending facility (MLF) loans to select financial institutions at 2.50%, consistent with the previous operation.

According to a Reuters poll involving 31 market analysts, all respondents anticipated the PBOC’s decision to keep the interest rate on MLF loans unchanged.

With 170 billion yuan worth of MLF loans set to mature this month, the central bank’s action resulted in a net withdrawal of 70 billion yuan from the banking system.

In addition to maintaining the MLF rate, the PBOC injected 2 billion yuan through seven-day reverse repurchase agreements while leaving borrowing costs unchanged at 1.80%, as stated in an online announcement.