The Central Bank of China (PBOC) has unexpectedly maintained its interest rates despite expectations for more stimulus to be implemented as the country struggles with the Covid-19 surge.
In the surprise move, the BOC left its one -year medium -term lending rate unchanged at 2.85%.
The world’s second-largest economy is now facing its worst Covid-19 wave since the outbreak began in late 2019, following the closure of major cities such as Shanghai.
These massive sanctions sparked expectations that economic growth would fall below the government’s target of 5.5% for the year, prompting some economists and analysts to expect interest rates to fall.
Prime Minister Li Keqiang last week said that China would step up stimulus measures to support the economy, while also warning that the closure of Covid-19 could pose risks to the country's economic growth.
Meanwhile, the central bank also did not issue more cash into the financial system, instead opting to roll out 150 billion yuan ($ 23.5 billion) of mature loans in medium -term loan facilities.
The yuan traded stable following the results by trading around 6.40 against the US dollar during the Asian session.
