Central Bank of China left yuan rate unchanged

The People’s Bank of China (PBOC) decided to leave the interest rate on 1-year loans (MLF) without changes.

The PBOC statement reports that the bet that serves as a political interest rate will remain unchanged at 2.5 percent.

Using the medium -term credit mechanism (MLF), the bank provided the market with 182 billion yuan (about $ 25 billion) at 2.5 percent. 4 billion yuan (about 551.2 million dollars) with a maturity of 7 days at a rate of 1.8 percent are placed using the reverse repo.

MLF allows Chinese banks to receive medium -term loans from the Central Bank in exchange for their securities.

In the return repo transactions, the Central Bank transfer funds to the market by buying securities for subsequent resale.

It is noted that PBOC retains a careful monetary policy against the backdrop of the expectation of expanding monetary policy to stimulate market growth due to low inflation.