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CHINA Data Preview: Loan Prime Rates Likely on Hold Tomorrow.

CHINA DATA

  • Commercial banks will likely keep their 1 and 5 year Loan Prime Rates (“LPR”) on hold tomorrow after July’s cut.
  • The one-year LPR which is used as the benchmark for commercial loans and the five-year LPR, which is used as the reference rate for mortgages, will likely remain at 3.35% and 3.85% respectively.
  • Whilst the PBOC has reiterated its support for the economy, it has cautioned that it won’t be adopting ‘drastic’ measures.
  • We read this as allowing time for existing policies to flow through to the economy.

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