China's central bank on Monday rolled over maturing medium-term policy loans while keeping the interest rate unchanged for a second month, reinforcing expectations that conditions will continue to stay loose to help the pandemic-hit economy.

The People's Bank of China (PBOC) kept the rate on 500 billion yuan worth of one-year medium-term lending facility loans to some financial institutions at 2.75 percent, unchanged from the previous operation.

Monday's move was to "keep banking system liquidity reasonably ample" and to "fully meet financial institutional demand", the PBOC said in an online statement.

With the same amount of such loans maturing on Monday, the operation resulted in no injection or withdrawal of medium-term liquidity on a net basis from the banking system.

Previously, the PBOC drained a net 200 billion yuan each in August and September.

China's third quarter GDP, due on Tuesday, is likely to highlight the intensifying challenges it faces amid weak domestic demand and slowing global growth, a Reuters poll showed.

But strong lending data from August has decreased the urgency for an interest rate cut, analysts and traders said, while a weakening currency limits room for the PBOC to manoeuvre its monetary policy as China has been a major outlier in a global run of policy tightening to tame rampant inflation. (Reuters)