SHANGHAI — China’s central bank on Wednesday rolled over maturing medium-term loans while keeping borrowing costs unchanged for the third straight month in a row.
The People’s Bank of China (PBOC) said it was keeping the rate on 400 billion yuan ($57.09 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions steady at 2.95% from previous operations.
The decision should indicate a similar action to the country’s benchmark loan prime rate (LPR) next Monday.
Wednesday’s MLF operation is a rollover of two batches of maturing MLF debt and a targeted medium-term lending facility (TMLF) due this month, the PBOC said in a statement on its website.
Two batches of MLF loans are set to expire in July, with a total volume of 400 billion yuan. Another batch of TMLF loan of 297.7 billion yuan is due to expire next Thursday.
The TMLF is allowed to roll over with a total term of three years, according to the statement.
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. ($1 = 7.0060 Chinese yuan) (Reporting by Winni Zhou and Andrew Galbraith Editing by Shri Navaratnam)