SHANGHAI, June 15 (Reuters) - China’s central bank on Monday rolled over some maturing medium-term loans while keeping interest rates unchanged for the second straight month in a row.
The People’s Bank of China (PBOC) said it was keeping the rate on 200 billion yuan worth of one-year medium-term lending facility (MLF) loans to financial institutions at 2.95%, the same as in the previous operation.
The PBOC said the cash injection was meant to ensure banking system liquidity is “reasonably ample”, according to an online statement.
The PBOC said in a separate statement last week that it would conduct a one-off MLF operation around June 15 this month.
Two batches of MLF loans are set to expire in June, with a total volume of 740 billion yuan.
A recent spike in Chinese bond yields is stirring expectations authorities want to stifle risky financial bets and guide cheap funding provided by banks into the coronavirus-battered economy.
The MLF’s unchanged rate could indicate the PBOC would also hold the country’s benchmark loan prime rate (LPR) steady later next Monday
The MLF, one of the PBOC’s main tools in managing longer-term liquidity in the banking system, serves as a guide for the LPR, which is set monthly using assessments from 18 banks.
Reporting by Winni Zhou and Andrew Galbraith Editing by Shri Navaratnam