China’s Central Bank Holds Key Rate in Policy Surprise

(Bloomberg) — China’s central bank held a key interest rate steady on Monday while still pumping more cash into the financial system, bucking expectations that it would cut borrowing costs to support the economy.

The People’s Bank of China (PBOC) maintained the rate on its one-year policy loans — called the medium-term lending facility — at 2.5%, contrary to widespread expectations among economists that it would make its first trim to the rate since August. It also offered 995 billion yuan ($139 billion) through the MLF, resulting in a 216 billion yuan net injection that will boost liquidity and help meet funding demand.