April 12 Reuters China39;s central bank is set to leave a key policy rate unchanged when rolling over maturing mediumterm loans on Monday, a Reuters survey showed, while a vast majority of respondents also expect some liquidity to be drained via the bond instrument.

Market watchers widely believe Beijing will continue to prioritise the stability of the yuan, at a time the Chinese currency is facing renewed depreciation pressure. It weakened to a fivemonth low this week, dragged down by a resurgent U.S. dollar.

In a Reuters poll of 31 market watchers conducted this week, all respondents expected the People39;s Bank of China PBOC to leave the interest rate on oneyear mediumterm lending facility MLF loans unchanged at 2.50 when rolling over 170 billion yuan 23.49 billion worth of such loans.

Among them, 24, or 77 of all participants expected the central bank to partially roll over the maturing loan. Another four respondents forecast a full rollover, while the remaining three predicted the PBOC to inject fresh funds exceeding the maturity.

The strong consensus on steady MLF rate comes amid rising yuan depreciation pressure amid a stillshaky domestic economic recovery and push back of market expectations around the timing of a first Federal Reserve interest rate cut this year.

That has in turn maintained a wide U.S.China yield gap, giving yuan bears the upper hand.

The PBOC appears to be favouring utilising reserve requirement ratio RRR cuts over interest rate cuts to…