PBOC Likely To Cut RRR, Guide Down LPR-Times

The People’s Bank of China is likely to release long-term low-cost funds by reducing the reserve requirement ratio given that there will be a large amount of medium-term lending facility funds maturing from September to December, the Securities Times noted in a front-page commentary. Meanwhile, the central bank may further guide down the benchmark Loan Prime Rates following the reductions recorded earlier this week. The 5-year LPR can be lowered further to drive down the mortgage interest rates, as the rates applied to many outstanding mortgages are still higher than wealth management product yields and deposit interest rates, which will lead to increased mortgage prepayment and affect the stability of the scale of loans, the newspaper said.