MNI BRIEF: China’s July Loan Prime Rate Unchanged

China's Loan Prime Rate remained unchanged on Thursday, 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 July 17.

The one-year LPR, based on the PBOC’s Medium-term Lending Facility rate and quotes submitted by 18 banks, was left at 3.55% and the five-year plus maturity was held at 4.2%.（See MNI PBOC WATCH: LPR To Remain Unchanged, H2 RRR Cut Possible). The bank offered a net CNY3 billion through one-year MLF this month with the rate unchanged at 2.65%.

Policy advisors and economists estimated the PBOC would cut reserve requirement ratios in Q3 to lower lenders’ funding costs as the economic and financial situation weakens and the PBOC’s medium-term lending facility increasingly maturities.