MNI BRIEF: PBOC Leaves Loan Prime Rates Unchanged in March

China's central bank on Monday left its key loan rate unchanged for the 11th straight month as it flags a "policy normalization" stance given the country's record-high debt.

The Loan Prime Rate, the benchmark to set companies' cost of borrowing, remains at 3.85% for the one-year maturity and 4.65% for five-years.

The move was expected as the PBOC had left Medium-Term Lending Facility rate at 2.95% on Jan 15. The LPR is linked to the one-year MLF, which is viewed as being closer to market rates.

Since the previous LPR reform in August 2019, the PBOC has cut 46 bps off the one-year LPR and 20bps off the five-year. In April 2020, after seeing a 6.8% contraction in Q1 GDP, the PBOC cut the one-year LPR by 20 bps and the five-year by 10 bps, the biggest cuts since the LPR mechanism reform in August.