MNI BRIEF: China’s April Loan Prime Rate Unchanged
China's Loan Prime Rate remained unchanged on Monday according to a People's Bank of China statement, in line with market expectation following the central bank’s decision to hold its policy rate steady as U.S. dollar strength weighs on the yuan and solid Q1 GDP growth reduces the need for monetary easing in the short term.
The one-year LPR, based on the PBOC’s Medium-term Lending Facility rate and quotes submitted by 20 banks, was left at 3.45% and the five-year plus maturity was held at 3.95%. (See MNI PBOC WATCH: April LPR Likely To Hold Steady As Yuan Weakens)
The central bank kept its one-year MLF rate steady last week at 2.5%, and made its second consecutive monthly net drain of the MLF at CNY70 billion. Meanwhile, the PBOC continues to shore up the yuan via a stronger-than-expected fix and tighter offshore yuan (CNH) liquidity.The significant pressure on the yuan will restrain the PBOC’s rate-cut pace.