MNI BRIEF: Nov LPR Remains Unchanged

China’s Loan Prime Rate was left unchanged on Thursday, as expected, with the central bank maintaining its stance amid ongoing pressure on banks’ interest margins and confidence that the 5% annual GDP growth target remains within reach.

The People’s Bank of China said on its website that the one-year LPR stayed at 3.0% and the five-year-and-above rate at 3.5%. Both were cut by 10bp in May after the PBOC lowered its 7-day reverse repo rate — the benchmark policy rate — by 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, CGB Purchases To Rise)

Advisors and economists told MNI that traditional easing tools such as interest-rate and RRR cuts are becoming less effective in an environment of subdued price levels and the PBOC will add medium and long-tenor of CGB holdings to guild their yields down.