China central bank injects $58 billion of loans but keeps rates steady

China's central bank extended fresh short- and medium-term loans on Wednesd...

SHANGHAI - China’s central bank extended fresh short- and medium-term loans on Wednesday but kept the borrowing cost unchanged, as it seeks to maintain adequate liquidity in a slowing economy and ease a potential crunch ahead of the Lunar New Year.

Separately, the PBOC also extended 100 billion yuan of 14-day reverse repos with the interest rate unchanged at 2.65%.In a statement, the central bank said the injection was meant to “offset impact from factors including tax payment and cash demand” and ensure that banking system liquidity was “reasonably ample” before the week-long Lunar New Year holidays kick off next Friday.

“While MLF rate can serve as guidance for LPR, an adjustment in the LPR is in theory possible with or without an MLF rate cut,” said Frances Cheung, head of macro strategy for Asia at Westpac in Singapore.

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