China’s direction of monetary easing even with US interest rate hike-Is it a LPR cut announced on the 20th?-Bloomberg

Economists believe that China’s major interest rate cuts will open the door to further monetary easing for the People’s Bank of China (Central Bank) as the Federal Reserve begins to raise interest rates in March.

On the 17th, the People’s Bank provided 700 billion yuan (about 12.6 trillion yen) of annual funds to the financial system through the medium-term lending system (MLF). Interest rates have been reduced from 2.95% to 2.85%. In addition, 100 billion yuan will be supplied through the 7-day reverse repo. Interest rates have dropped from the previous 2.2% to 2.1%.

People’s Bank of China reduced 1-year MLF interest rate to 2.85% -since April 2008

Following the reduction in MLF interest rates, the People’s Bank is expected to reduce the loan prime rate (LPR) announced on the 20th. LPR is an index of new lending interest rate. The one-year LPR has already been reduced by 5 basis points (bp, 1bp = 0.01%) in December last year, and attention is focused on whether the deferred 5-year LPR will be reduced last month.




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