China's central bank kept its key policy rates unchanged Monday, indicating a likely hold on the benchmark lending rate later this month.
The People's Bank of China injected 100 billion yuan ($13.79 billion) worth of funds into the financial system via its medium-term lending facility, which will charge banks an interest rate of 2.5%, unchanged for the 11th straight month.
This compared with maturing loans of CNY103 billion due this month, suggesting a net drain of 3 billion yuan from the banking system. This marks the fifth consecutive month of no net cash injection via the lending facility amid the central bank's drive to downplay the policy instrument's role in guiding markets.
The central bank also offered a net injection of CNY127 billion in funds via seven-day reverse repos to banks at an interest rate of 1.8%, also unchanged from its earlier operation.
The hold on the medium-term lending rate indicates that China's benchmark loan prime rate will likely be the same as it was last month since lenders price their prime loans using the medium-term lending rate. The PBOC will release its loan prime rate next Monday.
Write to Singapore Editors at singaporeeditors@dowjones.com
(END) Dow Jones Newswires
07-14-24 2205ET
