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China Partially Rolls Over MLF Loans After Reserve Ratio Cut

  • PBOC reduced reserve ratio last week to improve liquidity
  • Move feels like measured response from PBOC, DBS’s Leow says
Updated on

China rolled over part of the policy loans coming due this month as the central bank seeks to sustain its support for the economy after cutting the reserve-requirement ratio last week.

The People’s Bank of China injected 500 billion yuan ($78.5 billion) of one-year cash into the financial system, partially offsetting the 950 billion yuan coming due on Wednesday. It kept the interest rate on the loans unchanged at 2.95% for a 20th month. Attention now switches to the PBOC’s review of its loan prime rates next week, the de facto benchmark for new loans.