The People's Bank of China makes its monetary policy decision today, expected to cut the interest rate on its 1-year and 5-year Loan Prime Rates (LPR).
- decision is due at 0115 GMT
- The 1-Year Loan Prime Rate is currently at 3.70%
- most new and outstanding loans in China are based on the one-year LPR
- the 1-year was last cut in January
- The 5-Year Loan Prime Rate is currently at 4.45%
- most home mortgage rates are based on the five-year
- the 5-year was last cut in May
- Loan prime rates are set by 18 designated commercial banks. Proposed rates are submitted by these banks to the PBOC.
Via Reuters polling:
- 25 or 30 analysts surveyed predict a 10bp cut to the one-year LPR
- 30 of 30 expected a cut top the five-year rate (27 of them expect the cut will be greater than 10bp)
Last week the People's Bank of China cut the rate on its (semi) rollover of the maturing medium-term lending facility (MLF):
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Graph via Bloomberg on the rates for MLF, 1- and 5-year LPRs
