MNI BRIEF: China Sept LPR Remains Unchanged

China's Loan Prime Rate held steady on Monday, in line with expectations, with more easing expected later in the year as the economy suffers stronger headwinds, according to a statement on the website of People’s Bank of China. 

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. 

Advisors and economists forecast a 10bp 7-day repo rate cut and a 50bp reduction at reserve requirement ratio by year-end, and calls for the PBOC to resume government bond purchases to boost credit and inject liquidity into the interbank market. (See MNI PBOC WATCH: Sept LPR To Hold, Easing Seen On Econ Slowdown)