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SHANGHAI (Reuters) – China’s central bank renewed maturing medium-term loans on Monday while keeping borrowing costs unchanged for the fourth month in a row.
The People’s Bank of China (PBOC) said in a statement that it was keeping the rate of 700 billion yuan ($ 100.74 billion) of one-year medium-term loans (MLF) to financial institutions at 2, 95% compared to previous operations.
Analysts also expect no change for the country’s prime benchmark lending rate (LPR) on Thursday.
The injection of fresh funds far exceeds two batches of MLF loans due to expire in August, with a total volume of 550 billion yuan.
The PBOC said in the statement that the rollover was a one-time MLF operation for the entire month to “fully meet market demand.”
He also said he injected an additional 50 billion yuan into seven-day repurchase agreements while keeping the cost of borrowing stable.
The MLF, one of the PBOC’s main tools in managing the longer-term liquidity of the banking system, serves as a guide for the LPR, which is set monthly based on assessments from 18 banks.
Reporting by Winni Zhou and Andrew Galbraith; Editing by Jacqueline Wong
