June 16, 2022 - 11:54 AM 243 views
The People’s Bank of China (PBOC) probably keeps the benchmark loan prime rate (LPR) unchanged next Monday, after skipping adjusting the medium-term lending facility's anchoring rate this week, as reported by the Shanghai Security Journal.
Also, policymakers are watching stimulus effects after implementing the largest-ever 15-bps decrease to the five-year LPR last month.
The room for the Municipal Liquidity Facility (MLF) rate cut will be limited in the future amid the swift tightening of the monetary policy by the Fed (Federal Reserve), and the People’s Bank of China (PBOC) may utilize the decreasing LPR rate to activate the loan demand rate in the upcoming stage.
The Market Reaction
When last seen the USD/CNY pair was trading below 0.21% in a day at 6.6981 points while in the face of the predicted 75 basis point Fed rate move, the market is being weighed down by a broadly weaker US dollar.
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