PBOC leaves policy unchanged despite calls to bolster the economy

There have been mixed expectations for the PBOC to cut the 1-year MLF rate today by around 5-10 bps, in order to cushion against a further economic slowdown. But the central bank has moved to keep that unchanged, though one can expect a RRR cut to follow soon enough surely.

Besides the above, the PBOC also opted to not inject further liquidity into the system as it chooses to roll over the ¥150 billion worth of loans maturing today under the MLF. That resulted in a zero net cash injection into the system.

The borrowing cost for the 7-day reverse repo rate was also kept unchanged at 2.10%.