PBOC cuts one-year Loan Prime Rates to 3.45% but keeps five-year LPRs unchanged
On Monday, China's central bank, the People’s Bank of China (PBOC), lowered the one-year Loan Prime Rate (LPR) to 3.45% from 3.55% previous and 3.40% expected. That said, the Chinese central bank kept the five-year LPRs unchanged at 4.20%.
It's worth noting that the PBoC previously cut the Medium-term Lending Facility (MLF), Standing Lending Facility rates (SLFs) and the the Reverse Repo Rates to infuse liquidity into the world's second largest economy.
The PBOC announcements were mostly expected after the last week's actions from the Chinese central bank.
Also read: China pushes for more bank lending, Japan advocates higher wages
Market reaction
USD/CNH renews intraday high to near 7.3160 following the announcements.
About PBoC Interest 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.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
