China Corporate Loan Rates May Drop despite Same LPR: Daily

The costs of business lending in China's economy have further room to fall despite the PBOC kept the benchmark Loan Prime Rate unchanged for the 16th month on Aug. 20, the Economic Information Daily, owned by Xinhua News Agency, said in a report citing market participants. The rates on DR007, 10y CGB and 1y Interbank Deposit have all declined following the July RRR cut by the PBOC, so the Q3 corporate lending rates are also likely to drop as policies pushing for lower borrowing costs take effect, the newspaper said citing analyst Wang Qing of Golden Credit Ratings. The next-stage policies are likely to further fiscal policy measures and ensure ample liquidity on the basis of the so-called cross-cycle adjustment, the newspaper said. In an effort to stress structural reform and more sustainable measures, China has promoted the new expression in place of the previous countercyclical adjustment, seen as a more short-term boost.