China's benchmark lending rates remained unchanged in August - recap

Earlier:

• People's Bank of China leaves Loan Prime Rates (LPRs) unchanged

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:

• PBoC announces cut to 7-day reverse repo rate to 1.70% from 1.80%
• at the same time the Bank lowered collateral requirements for medium term lending facility loans

On the same day they cut LPRs:

• China cuts 1 and 5 year loan prime rates by 10 basis points each

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

• People's Bank of China reduces 1 year Medium-term Lending Facility (MLF) rate to 2.3%