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MNI STATE OF PLAY: Analysts See PBOC Point To Lower August LPR

(MNI) London

PBOC's move to trim policy rates on Aug 15 has been taken by analysts as a pointer towards a lower loan prime rate next week.

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China’s benchmark Loan Prime Rate (LPR) is likely to be pushed lower next Monday following the People’s Bank of China’s surprise cut to key policy rates on Aug. 15, as it seeks to boost credit demand and reverse the slowing post-lockdown economic recovery, according to analysts.

The PBOC unexpectedly trimmed 10 bps from rates across the curve this week, bringing the 7-day reverse repo rate to 2.0% and the 1-year medium-term lending facility (MLF) rate to 2.75%. The move was seen as a response to recent weak credit data as well as July’s softening production, consumption and investment figures.

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China’s benchmark Loan Prime Rate (LPR) is likely to be pushed lower next Monday following the People’s Bank of China’s surprise cut to key policy rates on Aug. 15, as it seeks to boost credit demand and reverse the slowing post-lockdown economic recovery, according to analysts.

The PBOC unexpectedly trimmed 10 bps from rates across the curve this week, bringing the 7-day reverse repo rate to 2.0% and the 1-year medium-term lending facility (MLF) rate to 2.75%. The move was seen as a response to recent weak credit data as well as July’s softening production, consumption and investment figures.

Keep reading...Show less