China Keeps Medium-Term Lending Facility Rate Unchanged
China left its medium-term lending facility rate unchanged on Monday as the central bank focus more on diverting risks to the weakening yuan.
The People’s Bank of China conducted CNY 100 billion of one-year MLF at an interest rate of 2.5 percent. The interest rate was kept unchanged from the previous session.
The bank injected CNY 2 billion via seven-day reverse repos at a rate of 1.8 percent.
The PBoC said the action is intended to keep liquidity reasonable and ample in the banking system to satisfy the requirements of financial institutions.
The MLF acts as a guide to the loan prime rate fixing. As the MLF rate was kept unchanged today, the loan prime rates are likely to be maintained this month.
The quarterly national accounts, industrial production and retail sales figures are due on April 16.
The second-largest economy is widely expected to grow at a slower pace of 4.8 percent in the first quarter after rising 5.2 percent in the preceding period.
While Beijing aims to achieve economic growth of about 5 percent this year, the Asian Development Bank last week said China’s economy will expand only 4.8 percent and will ease further to 4.5 percent in 2025.
Data released last week showed that inflation almost stagnated in March. Consumer prices moved up marginally by 0.1 percent following a 0.7 percent increase in February.
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