China keeps key rate at 2.75% and signals LPR will remain unchanged this week

The People’s Bank of China (PBOC) left its key interest rate unchanged, suggesting that the PBOC may maintain the loan prime rate (LPR) this week.

The PBOC left the one-year medium-term lending facility(MLF) rate, China’s benchmark rate, at 2.75%.

Meanwhile, the PBOC provided liquidity of 500 billion yuan ($69.6 billion) through its financial instruments and liquidity of 2 billion yuan through a 7-day reverse repo transaction at an interest rate of 2%, unchanged from the previous measure.

The unchanged MLF rate could be a sign that the PBOC will hold the 1-year LPR at 3.65% and the 5-year LPR at 4.30% on Thursday (October 20).

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