China kept its benchmark loan prime rates unchanged for the seventh consecutive month, as widely expected, on Friday.

The one-year loan prime rate was retained at 3.85 percent and the five-year loan prime rate was maintained at 4.65 percent.

The one-year and five-year loan prime rates were last reduced in April. The one-year loan prime rate was lowered by 20 basis points and five-year rate by 10 basis points in April.

The loan prime rate is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. This new lending rate replaced the central bank’s traditional benchmark lending rate in August 2019.

As the PBoC had not adjusted the rate on its medium-term lending facility early this month, commercial banks were widely expected to retain the LPR today.

Given that the economy is now back on track and fiscal policy is set to remain supportive until at least the start of next year, the PBoC is shifting its focus away from supporting growth back towards addressing financial risks and moral hazard, Julian Evans-Pritchard and Sheana Yue, economists at Capital Economics, said.

And while the PBoC will probably want to start increasing the LPR at some point, recent comments by the vice governor suggest that it is no rush to do so, economists noted.

The economists expect PBoC policy rates to rise by 30 basis points in 2021.

The material has been provided by InstaForex Company – www.instaforex.com

Leave your vote

🚀If you want to get a Forex Robot Coded as per your trading strategy but are unable to do so because of the high price for the Robot then you can take advantage of the CROWD FUNDING campaigns feature. ✔ These are some crowd funding campaigns for Forex Robots, which when completed can provide the very same Forex Robot to the participants at an average price of $5-$10 per participant. ✔ You either participate in one of the already listed campaigns or send us your Forex strategy : Submit Crowd Funding Campaign , for which you would like the Forex Robot to be coded. A Crowd Funding Campaign would then be started for the same . ✔ All you have to do later on is to share the campaign online with your friends to encourage more people to participate in the campaign.

As a result, each participant can get that Forex robot for just a campaign contribution of $5 (which is the minimum). Participants can back the campaign by anything above or equal to $5 to reach the funding goal to close the campaign.