MNI BRIEF: China Feb LPR Remains Unchanged
MNI (BEIJING) - China's Loan Prime Rate remained unchanged on Thursday according to a People's Bank of China statement, in line with expectations as the central bank held its easing pace to curb over-leverage in the bond market and reduce pressure on the yuan.
The LPR was held at 3.1% for the one-year maturity and 3.6% for the five-year tenor and over. Both rates fell in October by 25 basis points, the largest cuts since the reform of the new LPR pricing system in 2019, following the PBOC’s 20bp reduction on its 7-day reverse repo rate in September. (See MNI PBOC WATCH: China Feb LPR To Remain Stable)
MNI reported recently that the current low prices have diminished the effectiveness of traditional monetary easing moves, and the authorities should focus on shoring up the stock market and coordinating fiscal stimulus to boost credit demand and avoid idle funds cycling inside the interbank market. (See MNI INTERVIEW: Call For PBOC To Boost Support For Stock Market)