China’s benchmark lending rates remained unchanged in August – recap

Earlier:

ICYMI:

China’s benchmark lending rates remained unchanged in August

  • both 1 year and 5 year LPRs were cut by 10 basis points in July
  • one-year loan prime rate stayed at 3.35%
  • the five-year rate was maintained at 3.85%

Last month China’s central bank confirmed several reforms to its interest rate framework, shifting from using the previous LPR precursor to shorter-term seven-day reverse repurchase agreements. Previously, banks were instructed to set their LPR based on the interest rates from the PBOC’s medium-term lending facility.

The moves last month, beginning on July 22:

On the same day they cut LPRs:

Then they followed up three days later with a surprise, shock, cut to their Medium-term Lending Facility (MLF) rate:

This article was written by Eamonn Sheridan at www.forexlive.com. Source