The People's Bank of China rolled over medium-term policy loans and kept interest rates unchanged for one year

　　The People's Bank of China extended medium-term policy loans on Monday, increasing liquidity support for the banking system and leaving interest rates unchanged amid fears of a further sharp depreciation in the yuan.

　　The statement said 106 billion yuan of open market reverse repurchase operations and 789 billion yuan of medium-term lending facility (MLF) operations will be carried out to maintain sufficient liquidity in the banking system.

　　With 500 billion yuan of MLF maturing this month, the central bank issued a net 289 billion yuan in October's MLF renewal, the largest net injection in nearly three years.

　　At the same time, it left its one-year policy lending rate unchanged at 2.50 percent, in line with a Reuters poll last week.

　　"Monday's operation shows that the central bank wants to provide liquidity to ease market pressure," said Zhou Tong, global head of China markets at United Overseas Bank.

　　The People's Bank of China has cut MLF rates twice this year to soften the blow from weak consumption and a deepening property crisis. But further monetary easing could widen China's yield gap with the United States, putting fresh downward pressure on the yuan, which has fallen about 5.5 percent against the dollar this year.

　　Xing Zhaopeng, senior China strategist at ANZ, said: "The People's Bank of China's decision not to cut interest rates on Monday does not rule out a 5 basis point cut in the one-year benchmark lending rate on Friday. We believe the central bank will maintain one easing per month."

　　Louise, chief economist at Oxford Economics, said: "China's monetary policy is expected to remain dovish in the near term. The central bank is expected to cut interest rates by a further 10 basis points in the fourth quarter and cut the reserve requirement ratio by another 25 basis points in December.