The People’s Bank of China (PBOC) said it was keeping the rate on 170 billion yuan ($24.75 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75% from the previous operation.
Monday’s operation was aimed at keeping “banking system liquidity reasonably ample,” the central bank said in an online statement.
In a Reuters poll of 29 market watchers conducted last week, all participants expected no change to the MLF rate, while 23 forecast fund offerings would exceed maturity.
With 150 billion yuan worth of MLF loans set to expire this month, the operation resulted in a net 20 billion yuan of fresh fund injection into the banking system.
Higher cash offerings could help banks tide over the quarterly tax payment period in mid April, with some brokerages estimating as much as 1.7 trillion yuan could be withdrawn from the banking system.
Some market analysts and traders said stronger-than-expected…
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