MNI BRIEF: China LPR Remains Unchanged In August

China's Loan Prime Rate held steady on Wednesday, in line with expectations as the central bank highlights structural facilities to support key sectors. 

The LPR remained unchanged at 3.0% for the one-year maturity and 3.5% for the five-year tenor and over. Both rates fell in May by 10bp after the PBOC lowered the 7-day reverse repo rate – its benchmark policy rate – 10bp to 1.4% on May 8, followed by a 50bp reduction to the reserve requirement ratio on May 15. (See MNI PBOC WATCH: LPR To Hold Despite Looming Headwinds)

In its latest Monetary Policy Report last Friday, the central bank stressed the need to implement accommodative policy “in a detailed manner” with a focus on financing for small and micro enterprises, technological innovation, and consumption, signaling it will continue to guide lenders to increase credit supply through expanded relending tools.