MNI BRIEF: China’s Aug Loan Prime Rate Unchanged
China's Loan Prime Rate remained unchanged on Tuesday according to a People's Bank of China statement, in line with market's expectation, and as the central bank continued to hold the key 7-day reverse repo rate stable.
The Loan Prime Rate remained at 3.35% for the one-year maturity and 3.85% for the over five-year tenor. Both rates unexpectedly fell last month by 10 basis points after the central bank lowered the 7-day reverse repo rate by the same level. (See MNI PBOC WATCH: Aug LPR To Hold Steady, Policy Easing Ahead)
Sluggish credit demand and soft economic performance will likely push the central bank to cut rate or lower the Reserve Requirement Ratio later this year, particularly in September since fiscal authorities have accelerated bond issuance in Q3 and the U.S. Federal Reserve could start cutting rates next month, MNI has reported. (See MNI: China LPR To Hold In Aug, More Easing Eyed - Economists)