The People's Bank of China set a key interest rate today, due at 0130GMT 21 October 2019
- The Loan Prime Rate (LPR)
- Its a monthly setting
- set by 18 banks
The PBOC has recently pegged it to the MLF (medium-term lending facility)
At the previous monthly setting the rate was lowered a touch:
- 1 year loan prime rate was set at 4.20% (from 4.25% a month earlier)
- 5-year LPR set unchanged rate at 4.85%
Another reduction is the market expectations today:
- 1 year expected to 4.15%
- the 5 year may remain unchanged again, or a small drop to 4.83%
The LPR is loosely linked to the rate set on the PBOC's medium-term lending facility (MLF) which which has been steady lately at 3.30% (one year loans)
A lowered rate should be a positive for China and China-proxy trades, at the margin.
