PBOC Keeps Rates Unchanged, Partly Rolls Over Medium-Term Loans

Source: Reuters

The People’s Bank of China (PBOC) on Wednesday partially rolled over maturing medium-term loans in a bid to drive liquidity as the market expects the easing of measures. CNYA is down 0.70%.

• The PBOC kept the rate of its 500-billion yuan one-year medium-term facility steady at 2.95% or the 20th consecutive month.
• The central bank earlier decided to reduce the reserve requirement ratio to unleash 1.2 trillion yuan to the financial system, effective Wednesday.
• The latest measure is set to offset some of the 950-billion yuan in medium-term lending facility loans due to mature Wednesday.
• Analysts believe the latest development confirms the central bank’s commitment to ensure sufficient liquidity coming into 2022.
• The PBOC is expected to be in a wait-and-see mode, as the retained rates indicate a prudent tone of monetary policy.