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MNI STATE OF PLAY: China’s 5-Yr LPR To Fall As Soon As October

MNI (Singapore)

The rate used to price mortgages may be lowered as soon as next month to bolster the property market.

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The reference rate used to price Chinese mortgages is expected to be cut as soon as next month to help bolster the property market and economic recovery after both the one-year and five-year Loan Prime Rates were kept steady at their monthly pricing.

The LPR for loans of five years or more, which is used to price mortgages, remained at 4.3% and the one-year rate was unchanged at 3.65%, according to the People’s Bank of China. The LPRs are priced off the rate of the PBOC’s medium-term lending facility and quotes submitted by 18 banks. The MLF rate, a key policy rate for pricing bank funding, is expected to be cut in the fourth quarter.

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The reference rate used to price Chinese mortgages is expected to be cut as soon as next month to help bolster the property market and economic recovery after both the one-year and five-year Loan Prime Rates were kept steady at their monthly pricing.

The LPR for loans of five years or more, which is used to price mortgages, remained at 4.3% and the one-year rate was unchanged at 3.65%, according to the People’s Bank of China. The LPRs are priced off the rate of the PBOC’s medium-term lending facility and quotes submitted by 18 banks. The MLF rate, a key policy rate for pricing bank funding, is expected to be cut in the fourth quarter.

Keep reading...Show less