MNI BRIEF: China’s Dec Loan Prime Rate Unchanged

China's Loan Prime Rate remained unchanged on Wednesday according to a People's Bank of China statement, in line with market expectation following the PBOC's decision to keep a key policy rate steady on Dec 15.

The one-year LPR, based on the PBOC’s Medium-term Lending Facility rate and quotes submitted by 18 banks, was left at 3.45% and the five-year plus maturity was held at 4.2%.（see: MNI PBOC WATCH: LPR To Hold As CGB Liquidity Pressures Lenders).

The central bank kept its one-year medium-term lending facility rate steady last week at 2.5%, but pumped about CNY800 billion of MLF into the interbank market, the largest monthly net injection this year.

The central bank will increase liquidity injection via MLF and reverse repo option as tax payment and cash demand will drain liquidity from interbank market as the Chinese Spring Festival approaches on Feb 10, economists told MNI.