The People’s Bank of China, the country’s central bank, maintained a key policy rate on Friday, leaving most economists disappointed having expected a lowering of the rate to boost the economy during the current Covid outbreak, reports Bloomberg. The PBOC kept the rate on its one-year policy loans at 2.85% on Friday. Sixteen of the 22 economists surveyed by Bloomberg had predicted a reduction of 5-10 basis points, with the rest expecting no change.
The PBOC also refrained from injecting extra liquidity into the financial system, opting instead to roll over the RMB 150 billion ($23.5 billion) of loans maturing in the medium-term lending facility.
China’s 10-year government bond yield rose 2 basis points to 2.77% after the announcement, while the offshore yuan was steady at 6.3907 per dollar. The benchmark CSI 300 Index fell as much as 0.8% in early trading after rallying 1.3% on Thursday amid expectations of a rate cut. The liquidity-sensitive ChiNext Index opened 0.9% lower after closing little changed on Thursday.