SHANGHAI/SINGAPORE — China's central bank left a key policy rate unchanged as expected on Monday when rolling over maturing medium-term loans, and drained some funds from the banking system.The steady MLF rate comes in line with market expectations, as narrowing interest margins and a weakening currency remain key constraints limiting Beijing's scope to ease monetary policy to support the world's second-largest economy.
In a Reuters poll of 31 market watchers, 30, or 97 percent, of all respondents expected the PBOC to leave the interest rate on MLF rate unchanged.Net interest margin, which measures lenders' profitability, narrowed to 1.54 percent in the quarter from 1.69 percent in the previous three months.China's yuan has lost more than 2.1 percent against a resurgent US dollar so far this year, pressured by its relative low yields versus other economies.