China Economy

China's central bank extends medium-term loans but keeps rates unchanged

Key Points
  • China's central bank extended loans through its medium-term lending facility (MLF) on Wednesday while keeping the lending rate unchanged.
  • Some analysts believe that keeping the borrowing costs on medium-term loans unchanged reflects policymakers' inclination to avoid loosening monetary policy too much lest it stokes a credit binge.
Pedestrians walk past the People's Bank of China headquarters in Beijing, China, on January 7, 2019.
Giulia Marchi | Bloomberg | Getty Images

China's central bank extended loans through its medium-term lending facility (MLF) on Wednesday while keeping the lending rate unchanged.

The People's Bank of China (PBOC) said on its website the interest rate on one-year MLF loans remained at 3.3%, the same as the previous operations.

The PBOC also said it has injected 200 billion yuan ($28 billion) into financial institutions via the liquidity tool.

The central bank usually conducts MLF operations when there is a maturity coming due, but there are no loans maturing on Wednesday.

Some analysts believe that keeping the borrowing costs on medium-term loans unchanged reflects policymakers' inclination to avoid loosening monetary policy too much lest it stokes a credit binge.