MNI BRIEF: China’s May 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 as the drop in market rates and efforts to curb idle funds in the financial system restrained rate cut chances.
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%. The rate last changed in February when the five-year plus maturity was reduced 25 basis points, while one-year tenor held steady.n(See MNI PBOC WATCH: May LPR To Remain Steady As Market Rates Fall )
The PBOC kept the one-year MLF unchanged at 2.5% on May 15 and injected CNY125 billion to offset maturities, the first flat injection after two consecutive monthly drains. The decision was largely expected due to the continued narrowing of commercial bank’s interest margin and the risk of yuan depreciation.