Analysts Expect May LPR Unchanged

China’s loan prime rate (LPR) should remain unchanged this month following the PBOC’s decision to hold MLF operations stable, analysts interviewed by Securities Daily have said. Wen Bin, chief economist at Minsheng Bank, said looking ahead authorities could use quantitative tools to promote moderate price increases and support the real economy, but in the short term will be unlikely to implement RRR and interest rate cuts given the need to stabilise the exchange rate and prevent idle funds. Wen noted the economy faces tighter liquidity in November/December given the low volume of maturing government bonds, and the PBOC may use RRR cuts to protect liquidity and ease MLF operational pressure.