People’s Bank of China Loan Prime Rate Setting due today – no rate change is expected

I posted on the LPR setting coming up later (0115 GMT) earlier here:

• Economic calendar in Asia 20 July 2023 – People’s Bank of China rate announcement

According to a Reuters poll of 26 analysts, the one-year benchmark loan prime rate will remain at 3.55% and the five-year benchmark loan prime rate will remain at 4.20%, respectively, after the PBOC kept the rate on maturing medium-term policy loans rolled over this week unchanged.

• People’s Bank of China set MLF rate at unchanged 2.65%, as expected

The background to the setting today is of course that China’s slipping closer to deflation, growth is feeble, youth unemployment is above 20%, and there are no signs of a reversal on the horizon. This is making the calls for more easing insistent and growing. These are unlikely to abate any time soon.

However, the PBOC doesn’t make rash, or many, moves to lower rates. Its rate reduction on the LPRs of 10 basis points in June marked the first since almost a year and the fourth since the pandemic.

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