Central Banks
China Holds Key Rate as Economy Prepares for ‘Difficult Year’
- PBOC maintains MLF rate at 2.5%, bucking analyst expectations
- Policymakers may still cut RRR, use targeted easing as support
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China’s central bank held a key interest rate as concerns about yuan volatility and the still-distant prospect of Federal Reserve easing limit the room policymakers have to support the economy.
The People’s Bank of China maintained the rate on its one-year policy loans on Monday, disappointing investors expecting the first trim since August. While the central bank pumped more cash into the system to meet demand for funding, another round of weak credit numbers on Friday had bolstered expectations for bolder steps.