PBOC slashes one-year and five-year loan prime rates to 3.7% and 4.6% respectively
|The People’s Bank of China (PBOC) is out with the latest statement, announcing that it has cut the one-year loan prime rate (LPR) by 10-basis points to 3.70% at its January fixing.
Meanwhile, the five-year LPR was trimmed by 5-basis points to 4.6% in January. The five-year LPR was cut for the first since April 2020. In December 2021, the one-year was cut from 3.85% to 3.80%.
The AUD/USD pair is off the multi-day peaks on the PBOC rate decision, still holding onto most of the solid Australian jobs report-led gains. The spot is trading at 0.7245, up 0.49% on the day.
Meanwhile, USD/CNY is almost unchanged on the day, currently trading at 6.3451, little moved on the PBOC announcements.
About PBOC Rate decision
The PBOC Interest Rate Decision is announced by the People´s Bank of China. If the PBoC is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the CNY. Likewise, if the PBoC has a dovish view on the Chinese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.
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