PBOC To Guide Down Loan Rate For Key Sectors

Analysts expect the People’s Bank of China to guide down interest rates on loans further, targeting key and weak sectors through its structural monetary tools, with a cut to the reserve requirement ratio in Q3 or Q4 to lower lenders’ funding costs possible, China Securities Journal reported. The PBOC must keep the cost of business and consumer credit low to support the economic recovery. The analysts expected the central bank to enhance support to sectors such as technology, green transition, infrastructure and small businesses. The strength of easing will likely reduce this year compared to the fourth quarter last year, but overall liquidity will remain high in the interbank market, they said.