SHANGHAI — China’s central bank on Tuesday injected 600 billion yuan ($88.13 billion) worth of medium-term loans into the banking system while keeping borrowing costs unchanged for the fifth straight month.
The People’s Bank of China (PBOC) said in a statement it was keeping the rate on one-year medium-term lending facility (MLF) loans to financial institutions steady at 2.95% from previous operations.
Analysts expect the rate decision could indicate no change for the country’s benchmark loan prime rate (LPR) next Monday.
The PBOC also said Tuesday’s MLF operation would cover rollover offseting a batch of such loans expiring on Thursday, with a volume of 200 billion yuan.
And the operation should “fully meet financial institutions’ demand” while keeping banking system liquidity reasonably ample, according to the online statement.
The PBOC also said it has skipped reverse repo operations on Tuesday.
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 = 6.8080 Chinese yuan) (Reporting by Winni Zhou and Andrew Galbraith; Editing by Jacqueline Wong)