MNI POLICY: PBOC Says to Guide Rates Lower, Ensure Liquidity

     BEIJING (MNI) - The People's Bank of China (PBOC) will further guide

lending rates lower to support the resumption of business, production and

economic development, Director of Monetary Policy Sun Guofeng said at a press

briefing on Sunday.

     Sun said the central bank will:

     - keep reasonable and ample liquidity to reduce capital financing costs;

     - further reduce real interest rates by reforming the benchmark loan prime

rate (LPR), including promoting stock floating rate to pricing benchmark

conversion, enhance commercial banks' internal Funds Transfer Pricing system;

     - guide banks to appropriate reduce profit margins and cut lending costs to

the real economy;

     - continue to use benchmark deposit rate as the "stabilizer" of the whole

interest rate system;

     - reduce banks' non-compliant savings products, place guaranteed yield of

structured deposits under the Macroprudential Assessment, ensure an orderly

savings market and stabilize banks' liability side costs.

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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