Central bank holds interest rate steady to boost internal stability

China's central bank kept interest rates steady instead of following US monetary tightening moves on Thursday, shifting greater focus onto maintaining domestic economic stability and facing downside risk.

The People's Bank of China belied market expectations of a 5-basis-point hike when the US Federal Reserve announced a quarter-point increase of the funds policy rate. It chose not to change its seven-day open market operation reverse repo rate, the quasi-policy rate, at 2.55 percent.

In the meantime, the PBOC injected a net 70 billion yuan ($10.9 billion) into the interbank market through reverse repurchase operations to ease liquidity stress.