PBOC Seen Keeping MLF Rate Unchanged: Journal

The PBOC is likely to maintain the current MLF operating rate to the end of the year to allow controlled liquidity and also account for potential growth in Q4 and Q1 2021, the China Securities Journal reported citing Yan Se, an economist from Founder Securities. China is likely to expand its fiscal expenditure in the next two months to improve liquidity, and the probability of rate or RRR reductions are small given the current level of inflation, the Journal reporting citing Wen Bin, a researcher from China Minsheng Bank. The MLF renewals will likely carry a stable long-term interest rate to reduce financing costs and support the real economy, said Wen.