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PBOC Expected to Cut Lending Costs for 2nd Month: Web Site

CHINA PRESS
MNI (Singapore)

The People's Bank of China may cut by 10 bps its 1-year and 5-year Loan Prime Rates on Jan. 20, a stronger easing signal than a 10-bps cut to 1-year LPR alone in December, China.com.cn reported citing Wen Bin, the chief researcher at China Minsheng Bank. The reduction in loan references became expected by the market after the central bank on Monday cut both the 7-day reverse repo rate, a short-term interbank borrowing reference, and the 1-year medium-term lending facilities (MLF). The expected move will implement policymakers’ call for urgent countermeasures to arrest the current slowdown, which must rely on investments, it said. Thursday’s reduction in 5-year LPR will help lower medium-to-long term loan costs, which fund major infrastructure investments, the report said citing Zeng Gang, the deputy director of the National Institution for Finance & Development.

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