China: PBoC seen on hold this year – UOB

UOB Group’s Economist Ho Woei Chen, CFA, evaluates the recent decision by the PBoC to keep interest rates unchanged at its February event.

Key Quotes

“The People’s Bank of China (PBoC) kept its Loan Prime Rate (LPR) unchanged with the 1Y LPR and the 5Y & above LPR set at 3.85% and 4.65% respectively in February. This was the 10th straight month that the central bank held rates steady after its last cut in April 2020. The move was in line with PBoC’s decision to keep its 1-year medium-term lending facility (MLF) rate unchanged at 2.95% last Thursday (18 Feb).”

“Looking ahead, the combination of economic growth recovery and asset price inflation will be met with increasing vigilance from the PBoC. However, with growth recovery remaining uneven and some slowdown in economic activities at the start of the year as well as subdued consumer price inflation so far, we continue to see the need for supportive economic policies, including an accommodative monetary policy, at least in the near-term. As such, we expect the PBoC to keep its benchmark LPR steady through 2021 even though the degree of policy accommodation could be fine-tuned to adjust to the growth and inflation conditions.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD hits six-week high amid risk-on mood

EUR/USD has risen above 1.22, hitting the highest since mid-January. The US Fed's commitment to easing has boosted the market mood and the safe-haven dollar is down despite higher US yields. A big bulk of US data including GDP awaits traders.


AUD/USD breaks through critical 0.8000 level, fresh three-year highs

AUD/USD rides the reflation wave higher. The aussie reaches the highest since February 2018. Surge in commodities complex underpins the AUD.


Gamestop (GME) Stock Price and Forecast: Soars 273% as “diamond hands” trigger meme stock comeback

NYSE: GME is trading at around $168 in Thursday's premarket trade, up 273% from Wednesday's early trading price. The departure of the CFO served as the trigger to the fresh buying frenzy. Retail traders that have held onto shares seem to be behind the surge.

Read more

Dogecoin on the verge of a 75% lift-off

Dogecoin price has been lull ever since the local top on February 7. However, a 20% surge due to Elon Musk’s recent endorsement has led to a breakout from a bull flag pattern. Now, the meme coin could surge 75% to record levels soon.

Read more

US Dollar Index looks depressed near 90.00 ahead of data

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main rivals, remains under heavy pressure around the key 90.00 neighbourhood in the second half of the week.

US Dollar Index News