China’s central bank kept a policy loan rate unchanged after last cutting it in September, as the authorities stay patient in ramping up monetary stimulus.
The People’s Bank of China (PBOC) held the interest rate on the one-year medium-term lending facility steady at 2%, according to a statement on Monday. All of the 14 economists surveyed by Bloomberg forecast no change.
China’s economic data showed some early signs of stabilisation last month, after the government rolled out a range of measures from late September to put the economy back on track to hit the government’s growth target of around 5% this year.
In the monthly operation, PBOC offered 900 billion yuan ($166.85 billion) of policy loans via the tool, ending up with a net withdrawal of 550 billion yuan in November after deducting 1.45 trillion yuan of maturities.
The PBOC has used other liquidity tools in recent months to funnel funds into the financial system, including conducting outright reverse repo and purchases of government bonds.
China has also been revamping its policy rate framework as it seeks to influence market borrowing costs more effectively. To do that, it’s using the interest rate on seven-day reverse repurchase agreements as the key anchor while downplaying the role of the medium-term lending facility (MLF) rate.
