A cut to the one-year rate of 10bp vs. 15 that was widely expected.
And no cut to the 5 year rate at all. Thats a shock.
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Background to this is here:
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PBOC's Loan Prime Rate (LPR)
- It is an interest rate benchmark used in China, set by the People's Bank of China each month. While set on the 20th (the 21st this month given the 20th fell on a Sunday) the new LPR takes effect on the first day of the following month.
- The LPR serves as a reference rate for banks when they determine the interest rates for (primarily new) loans issued to their customers.
- Its calculated based on the interest rates that a panel of 18 selected commercial banks in China submit daily to the PBOC.
- The panel consists of both domestic and foreign banks, with different weights assigned to each bank's contributions based on their size and importance in the Chinese financial system.
- The LPR is based on the average rates submitted by these panel banks, with the highest and lowest rates excluded to reduce volatility and manipulation. The remaining rates are then ranked, and the median rate becomes the LPR.
Pan Gongsheng, People's Bank of China Governor