February LPR Likely To Be Lowered

The benchmark Loan Prime Rates are likely to be lowered in February following the cut to the reserve requirement ratio releasing CNY1 trillion in liquidity, along with lowered targeted relending rates for agriculture and small business and reduced deposit interest rates earlier, said Wen Bin, chief economist at Minsheng Bank. Uncertainty exists over whether the PBOC will cut the medium-term lending facility rate as early as February, said Wen. The PBOC may be concerned about declining net interest margin of commercial banks and high levels of global interest rates at the current stage, the timing of any rate cut may be later as inflation remains negative and real interest rates remain high, said Bian Quanshui, chief macro analyst with Western Securities. (Source: Securities Daily)