China's central bank is expected to leave a key policy rate unchanged and drain some liquidity via the bond instrument, according to a Reuters survey. Market watchers believe Beijing will prioritize the stability of the yuan amidst renewed depreciation pressure. The People's Bank of China (PBOC) is expected to roll over 170 billion yuan worth of one-year medium-term lending facility (MLF) loans at an unchanged interest rate of 2.50%.
- China 's central bank is set to leave a key policy rate unchanged when rolling over maturing medium-term loans on Monday, a Reuters survey showed, while a vast majority of respondents also expect some liquidity to be drained via the bond instrument.
Among them, 24, or 77% of all participants expected the central bank to partially roll over the maturing loan. Another four respondents forecast a full rollover, while the remaining three predicted the PBOC to inject fresh funds exceeding the maturity. The PBOC lowered the MLF twice by a total of 25 basis points in 2023 to shore up a stuttering recovery in the world's second-largest economy. But widening yield differentials with other major economies have constrained the central bank's scope to ease further.
NCDs has been a popular short-term debt instrument used by financial institutions in the interbank market for financing.
China Central Bank Policy Rate Liquidity Bond Instrument Yuan Depreciation Pressure MLF Loans
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