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MNI PBOC WATCH: LPR Cut Seen Despite Rising Bank Funding Costs

MNI (Singapore)
(MNI) Beijing

The reference rate for mortgages may be cut next month despite a squeeze on bank margins, advisers and analysts said.

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The reference rate used to price Chinese mortgages is expected to be cut next month after being held steady in November, with banks to lend support to the property market recovery despite rising interbank funding costs, advisers and analysts said.

The Loan Prime Rate, which is based on the rate of the People’s Bank of China’s Medium-term Lending Facility and quotes submitted by 18 banks, remained at 3.65% for the one-year maturity and 4.3% for over-five-year maturity on Monday, which was in line with market expectations. (See: MNI PBOC WATCH: Targeted Easing To Boost Credit, RRR Cut Seen)

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The reference rate used to price Chinese mortgages is expected to be cut next month after being held steady in November, with banks to lend support to the property market recovery despite rising interbank funding costs, advisers and analysts said.

The Loan Prime Rate, which is based on the rate of the People’s Bank of China’s Medium-term Lending Facility and quotes submitted by 18 banks, remained at 3.65% for the one-year maturity and 4.3% for over-five-year maturity on Monday, which was in line with market expectations. (See: MNI PBOC WATCH: Targeted Easing To Boost Credit, RRR Cut Seen)

Keep reading...Show less