China’s central bank leaves key policy rate unchanged

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China’s central bank left key policy interest rates unchanged on Wednesday after lowering reference lending rates in May to support the cooling of the economy.

The People’s Bank of China kept the interest rate on the medium-term loan line unchanged at 2.85% while injecting 200 billion yuan ($ 29.76 billion) of liquidity into the banking system through the MLF. , according to a statement on its website.

It also kept the interest rate on seven-day reverse repurchase agreements at 2.1% while injecting CNY 10 billion in liquidity through the monetary tool, according to the statement.

Last month, the central bank cut the five-year loan reference rate from 4.6% to 4.45% to try to reduce financing costs for troubled businesses.

Prior to the benchmark cut, the PBOC kept its MLF rates unchanged. Economists are closely watching changes in central bank MLF interest rates, which are used to set the price of the LPR, to predict possible changes in benchmark interest rates.

China’s main economic indicators improved in May, official figures showed on Wednesday, after Beijing eased its Covid-19 policy.

The PBOC’s next decision on the LPR is Monday.

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