China’s central bank injected billions of RMB through medium-term loans into the financial system on Monday, while keeping the interest rate unchanged for the 16th month in a row, reported the South China Morning Post.
The People’s Bank of China (PBOC) kept the rate on RMB 600 billion ($92.6 billion) worth of one-year medium-term lending facility (MLF) loan to some financial institutions steady at 2.95% from previous operations.
The central bank said the loan operation was meant to “fully meet financial institutions’ liquidity demand” while keeping the fund conditions “reasonably ample”.
The move “took into account that financial institutions could use part of the funds freed from a reduction to reserve requirement ratio (RRR) in July to pay back MLF loans due this month”, the PBOC added.
In the same online statement, the central bank said Monday’s operation was a rollover of RMB 700 billion of maturing MLF loans due on Tuesday.