In a Reuters poll last week, 54.3% of 35 market participants expected the central bank to cut the MLF rate for economic support.
China's central bank injected liquidity and caught markets off guard by maintaining the interest rate while renewing expiring medium-term policy loans on Monday.
The People's Bank of China (PBOC) announced it would keep the rate steady at 2.50% for 995 billion yuan ($138.84 billion) in one-year medium-term lending facility (MLF) loans to select financial institutions, in contrast to market expectations.
In a Reuters survey last week involving 35 market participants, 54.3% (19 respondents) anticipated the central bank's reduction of the MLF rate to support the weakening economy. Additionally, a majority of respondents expected the PBOC to infuse new funds into the financial system, surpassing the maturing amount.
As 779 billion yuan in MLF loans were set to mature this month, the operation resulted in a net injection of 216 billion yuan into the banking system.
In an online statement, the central bank mentioned injecting 89 billion yuan through seven-day reverse repos while maintaining the borrowing cost at 1.80%.
