MNI BRIEF: China Jan LPR Holds Steady
MNI (BEIJING) - China's Loan Prime Rate remained unchanged according to a People's Bank of China statement on Monday, in line with expectation as the central bank held its easing pace on the increasing pressure of 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: Jan LPR To Hold As Yuan Faces Pressure)
MNI reported that the yuan’s depreciation, and the fast drop of treasury yields due to the expectation of significant easing, will restrain the PBOC’s ability to cut rates. (See MNI: PBOC To Ensure Yuan Stability In Trump's Second Term)