China Central Bank Holds Key Rate Steady, Injects Liquidity

China's central bank kept its key policy rate unchanged on Friday while injecting billions into the financial market, signaling a potential shift toward longer-term stability in benchmark rates, The Wall Street Journal reports.

The People's Bank of China (PBOC) injected 200 billion yuan (approximately $27.44 billion) via the medium-term lending facility (MLF) at an interest rate of 2.0% and a maturity of one year. This rate remains unchanged from last month's injection.

Following the operation, outstanding MLF loans reached 4.294 trillion yuan, according to the central bank.

The MLF has historically served as a key factor in determining China's benchmark lending rates. However, the PBOC has been transitioning away from this approach, instead focusing on aligning benchmark rates with the interest rates of shorter-term monetary policy tools.