It's a light one for economic data, but we do get the monthly medium-term policy loan (Medium Term Lending Facility, MLF) rate set today from the People's Bank of China.
The PBOC have said repeatedly that it'll seek to continue to keep liquidity ample to support the economy. Next week April tax season payments are due, which, according to the estimate from China's CITIC Securities, could drain as much as 1.7 trillion yuan (around $250bn) from the banking system.
Expectations are near unanimous that the PBOC will keep the MLF rate unchanged today at 2.75%
As for the roll over (150bn yuan is maturing) of maturing loans, the PBOC is expected to inject extra funds, with the boost to liquidity estimated circa 100 to 300 bn yuan.
Later this week, on the 20th, we'll get the regular loan prime rate (LPR) setting from the Bank. Today's MLF rate is looked at as a guide to the monthly Loan Prime Rate (LPR) setting. Current LPRs:
-
3.65% for the one year
- most new and outstanding loans in China are based on the one-year LPR
- 4.30% for the five year
- most home mortgage rates are based on the five-year
