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MNI PBOC WATCH: Targeted Easing To Boost Credit, RRR Cut Seen

MNI (Singapore)
(MNI) Beijing

The over 5-year loan prime rate may be cut before the end of the year to provide cheaper credit.

True

The People’s Bank of China is expected boost credit growth by cutting the reserve requirement ratio and guiding down reference lending rates before the end of the year, though the use of targeted tools has limited the prospect of across-the-board easing, economists and policy advisers said.

Advisors and economists are divided on whether the over-5-year loan prime rate – which is used to price mortgages and long-term loans - will be lowered on November 21 or next month, after a partial rollover earlier this week of a maturing medium-term lending facility with an unchanged rate, which feeds into the pricing of the LPR.

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The People’s Bank of China is expected boost credit growth by cutting the reserve requirement ratio and guiding down reference lending rates before the end of the year, though the use of targeted tools has limited the prospect of across-the-board easing, economists and policy advisers said.

Advisors and economists are divided on whether the over-5-year loan prime rate – which is used to price mortgages and long-term loans - will be lowered on November 21 or next month, after a partial rollover earlier this week of a maturing medium-term lending facility with an unchanged rate, which feeds into the pricing of the LPR.

Keep reading...Show less