MNI BRIEF: China Nov LPR Holds Steady
MNI (BEIJING) - China's Loan Prime Rate remained unchanged on Wednesday according to a People's Bank of China statement, in line with expectation and as the central bank held its key 7-day reverse repo rate stable.
The LPR was held at 3.1% for the one-year maturity and 3.6% for the over five-year tenor. Both tenors fell 25 basis points last month, the largest reduction since authorities reformed the LPR pricing system in 2019, following the PBOC’s 20bp reduction at its 7-day reverse repo rate in September.
As pressure on the yuan rises and banks’ interest margins narrow, the central bank’s capacity to cut rates will be inhibited. In addition, the marginal improvement of the economy in October has reduced the urgency for further rate cuts this year. (See MNI PBOC WATCH: LPR To Remain Stable, Yuan Watched Closely)