*** China will publish it's reformed Loan.....>

CHINA: *** China will publish it's reformed Loan Prime Rate (LPR) for the 1st

time today (at 02:30 BST). The LPR will be set at 02:30BST on the 20th of each

month (excl. holidays & weekends, which will see the rate setting moved fwd).

- The reform had been flagged by off'ls & was long awaited. The reform will

benchmark the existing 1- & newly created 5-Year LPRs to the 1-Year MLF,

referenced with a spread, in what some are deeming de-facto monetary easing,

with the aim of supporting the slowing econ through lowering real lending rates.

- The move should help to better reflect mkt rates with 18 institutions (prev.

10, adding rural, commercial foreign-invested & pvt banks), submitting their LPR

quotations based on what they have bid for liquidity from the PBOC in OMOs, with

the highest & lowest removed & the arithmetic mean providing the ref rate. This

should alleviate some worry over state bank cartels setting rate floors.

- The wtd avg. int. rate applied in China stood at 5.94% in Q219, above the

antiquated 1-Year lending rate of 4.35% & the current 1-Year LPR of 4.31%.

- The LPRs should be used as the major ref rate when issuing new loans of 1- &

5+-Years.