China Keeps Lending Rate Unchanged As Expected
15 Maggio 2024 - 6:16AM
RTTF2
China's central bank left its medium-term lending facility rate
unchanged on Wednesday as policymakers focus more on the currency
stabilization.
The People's Bank of China conducted the CNY 125 billion of
one-year MLF facility. The rate on the MLF was retained at 2.5
percent.
The MLF usually acts as a guide to the loan prime rate fixing.
As the MLF rate was kept unchanged today, the loan prime rates are
set to be maintained this month.
The central bank also added CNY 2 billion via the seven-day
reverse repos at an interest rate of 1.8 percent, which was also
unchanged from the previous operation.
The PBoC said today's action is intended to maintain reasonable
liquidity in the banking system.
Earlier, ING economists said recent data revealed that low
inflation, credit contraction, slowing money supply growth, and
weak private sector investment present a strong case for rate cuts,
suggesting that real interest rates remain too high and that
reserve requirement ratio cuts are seeing diminished
effectiveness.
As currency stabilization has been a key consideration this
year, policymakers are likely to prefer for global rate cuts to
begin before starting to cut rates, economists noted.
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