MCHI - China Keeps Interest Rates Unchanged Amid Economic Uncertainty To Stabilize The Yuan And Manage Liquidity | Benzinga
In a bid to stabilize the yuan and manage liquidity, the People’s Bank of China has decided to keep its key interest rate unchanged for the tenth consecutive month.
What Happened: The PBOC has maintained the one-year policy loan rate, also known as the medium-term lending facility rate, at 2.5% for the tenth month in a row on Monday, reported Bloomberg.
This decision aligns with the forecast in a Bloomberg survey. The bank also withdrew a net 55 billion yuan ($7.6 billion) from the banking system to prevent excessive liquidity.
Despite a fragile recovery in the world’s second-largest economy, the PBOC has chosen to prioritize currency stability over reducing borrowing costs. This cautious approach may dampen market expectations for monetary easing, which have kept local bond yields near a two-decade low.
Despite growing calls for a rate cut, the PBOC has refrained from ...