China’s central bank kept its key policy rates unchanged on Friday while injecting fresh liquidity into the financial market. The People’s Bank of China held the interest rate of the one-year medium-term lending facility steady at 2.85% and the seven-day reverse repurchase agreement rate unchanged at 2.1%, according to a brief statement on its website.
Friday’s move to keep key interest rates on hold may indicate that the PBOC will maintain its benchmark loan prime rate unchanged this month, as commercial banks are told to price the LPR based on MLF rates. The PBOC will release the LPR next Wednesday. Meanwhile, the PBOC on Friday injected 100 billion yuan ($14.83 billion) worth of liquidity via one-year MLF and CNY3 billion of funds via seven-day reverse repo into the financial system.