China leaves benchmark financing fee unchanged for second right month
22 June, 2020
China still left its benchmark lending price unchanged for the second straight month in its June fixing on Mon (Jun 22), matching industry expectations, following the central lender kept borrowing costs on medium-term loans steady last week.
The one-year loan prime rate (LPR) remained at 3.85 % from keep going month's fixing, as the five-year LPR was also steady at 4.65 % from previously.
The move around in the LPR affects the price loan providers charge corporates and households for loans, and the five-year rate influences the pricing of mortgages.
A Reuters survey of dealers and analysts conducted last week showed more than 70 per cent of all participants expected China to keep the financing benchmark unchanged this month.
Only 20 % of most respondents predicted a marginal cut to one-year LPR.
The PBOC rolled over some maturing medium-term loans the other day while keeping interest levels unchanged for the next right month in a row.
The medium-term financing facility (MLF), among the PBOC's primary tools in managing longer-term liquidity in the bank operating system, serves as a guide for the new LPR. The interest on one-season MLF stands at 2.95 %.
The LPR is a financing reference rate set regular by 18 banks. The PBOC revamped the system to price LPR in August 2019, loosely pegging it to the MLF rate.
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