Central Banks
China Holds Key Rate, Withdraws Liquidity Amid Yuan Defense
- PBOC keeps rate on 1-year MLF loans unchanged at 2.75%
- Central bank net drains 200 billion yuan via MLF, as expected
The People's Bank of China headquarters in Beijing.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
China’s central bank drained liquidity from the banking system for a second straight month while leaving rates unchanged as it sought to ease pressure on the yuan from a widening policy divergence with the Federal Reserve.
The People’s Bank of China offered 400 billion yuan ($58 billion) via its medium-term lending facility, matching the median forecast in a Bloomberg survey. That would result in a net withdrawal of 200 billion yuan in September. The rate was held at 2.75% after being lowered by 10 basis points in August.