China Central Bank Keeps Key Policy Rate Steady

China's central bank kept a key policy rate steady Tuesday in an expected move, as authorities have guided for unchanged short-term policy rates so far this month.

The People's Bank of China injected 300 billion yuan, equivalent to $67.99 billion, into the country's financial system via its one-year medium-term lending facility at an interest rate of 2.0%, according to an official statement. The rate was unchanged from the previous month.

With a total of 500 billion yuan in MLF loans due this month, Tuesday's move suggests a net drain of 200 billion yuan of liquidity by the PBOC. After the operation, outstanding MLF loans stood at 4.094 trillion yuan, said the central bank.

While the MLF rate used to serve as China's main policy rate, the PBOC has recently moved to link the country's benchmark lending rates with the interest rates of a shorter-term monetary policy tool as it seeks to better guide the market.

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