(Yicai Global) June 15 -- China’s central bank injected CNY200 billion (USD30 billion) of fresh funds into the financial system today via renewed one-year medium-term lending facility loans, the same amount as the past two months, and kept the interest rate unchanged.

Another CNY200 billion worth of one-year MLF loans were released at a rate of 2.85 percent to offset the CNY200 billion due to expire the same day, the People’s Bank of China said. The rate has stayed the same since February but there might be room for further cuts in the future, analysts said.

There was no increase in the quantity of MLFs released this month because market liquidity is still sufficient, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International.

Three consecutive MLFs operations have been kept at the same amount because, as the credit structure is improved, there is reasonable money supply, said Zhou Maohua, macro analyst at China Everbright Bank.

Considering the MLF rate was left unchanged, the loan prime rate, which is the benchmark lending rate, is likely to also stay the same this month, Wang said. Last month the five-year LPR was cut by 15 basis points, so the central bank will be noting the boost it had on the property market.

There is still room for the LPR to fall further, said Ming Ming, chief economist at CITIC Securities. Authorities are still trying to reduce banking costs to leave more room for the interest rates to come down further.

The downward pressure on the economy is mainly due to the cooling real estate market, Wang said. Regulators need to focus on promoting lower mortgage interest rates next, and then in addition to a further cuts in the five-year LPR, the MLF rate could still come down in the third quarter, but not by much.

China still needs to be vigilant against imported inflation and policy spillovers from developed economies, Zhou added.

Editor: Kim Taylor