MNI BRIEF:PBOC Cuts Loan Prime Rate for 2nd Mon to Spur Growth

The People's Bank of China cut its 1-year and 5-year benchmark Loan Prime Rates (LPR) by 10 basis and 5 basis points on Thursday, a move largely expected by the market following another key rate cut on Monday and on the heels of bank officials’ pledge to ramp up lending and revive a flagging economy.

After the PBOC’s Thursday rates cuts, the 1-year and 5-year LPR now sit at 3.70% and 4.60%, according to a statement on the central bank's website.

The central bank on Monday cut the rate of the so-called 1-year medium-term lending facility (MLF) by 10 bps. MNI reported in December citing policy advisors that the PBOC would pursue further easing including key policy rate cuts before the Federal Reserve begins its rate hikes.

In a Tuesday briefing, PBOC officials said they would “open up its toolkits and avoid credit collapse” while pledging to boost the economy with every effort. The central bank last cut 1- year LPR in December, before it left the key lending benchmark unchanged for 19 months. The 5-year LPR had been kept unchanged for 20 months.