The PBOC's reform to link the...........>

CHINA PRESS: The PBOC's reform to link the benchmark lending interest rate with

the loan prime rate (LPR) and the medium-term lending facility (MLF) would

enable the central bank to effectively "cut rates" by lowering the rate of MLF,

China National Radio reported on Monday. Citing interviews with analysts, the

broadcaster noted market players' concern that a lower lending rate could lead

to the narrowing of banks' interest rate spreads and adversely affect commercial

banks. Ma Jun, a member of the PBOC's Monetary Policy Committee, believes it is

hard to say whether the interest rate spread will decline or by how much it

might decline as it is dependent on lending demand, risk premiums and policy

rates.