PBOC May Keep June LPR Unchanged-Securities Daily

The People’s Bank of China is expected to keep its Loan Prime Rate unchanged this month considering the actual corporate loan rates have already been falling and lenders are still suffering high borrowing costs, the Securities Daily reported citing market analysts. After the 15bps cut in the five-year and above tenor of LPR last month, it is less necessary to touch the policy rate in the short term, Liang Si, researcher with Bank of China, said. But there is still room for cuts later this year, particularly for the five-year and above tenor to boost the property market, said Xie Yunliang, an analyst with Cinda Securities, noting the PBOC could liberalise deposit rate mechanism to lower lenders’ funding costs in a bid to leave more room for LPR cuts.