MNI BRIEF: China’s June 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 as the central bank aims to hold the key policy rate stable due to weak yuan concerns and bank profits.
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: China LPR To Hold On PBOC's Cautious Stance). The rate last changed in February when the five-year plus maturity was reduced 25 basis points, while the one-year tenor held steady.
The PBOC kept the one-year MLF unchanged at 2.5% on June 17 and drained a net of CNY55 billion from the interbank market. The central bank wants to curb idle funds cycling inside the financial system and cool the bond market, which will further constrain the PBOC’s pace to lower its rates, MNI reported recently.