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MNI BRIEF: China’s Jan Loan Prime Rate Unchanged

MNI (Singapore)

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 PBOC's decision to keep a key policy rate steady on Jan 15.

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 4.2%.(see: MNI PBOC WATCH: LPR To Hold, Market Cut Expectations Persist).

The central bank kept its one-year medium-term lending facility rate steady last week at 2.5%, disappointing the market which had expected a reduction, but pumped about CNY216 billion of MLF into the interbank market.

China may delay the reduction of policy rates and the RRR to gauge the effectiveness of previous support and curb interbank arbitrage, economists told MNI.


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