PBOC interest rate refo上海419 small businesses

PBOC interest rate refo上海419 small businesses

Borrowing costs will get lower for companies in China starting Tuesday through a

key interest rate reform brought out by the People’s Bank of China, the central bank, to maintain ec上海419

onomic momentum amid the continuing trade friction with the United States.

上海419女神会所Analysts say the interest rate reform will lower financing costs for small a

nd private companies and encourage investment in the manufacturing sector.

The PBOC unveiled the policy over the weekend, saying it would introduce a new reference rate, the loan prime rate-the pr上海419

ice of loans banks offer their best clients-for setting the prices of business and household loans. The earlier re

上海419ference rate, the one-year benchmark lending rate, will be replaced in the future.

The announcement is seen as China’s most significant market-based interest rate reform for over a decade, experts said.上海419女神会所

The PBOC said in a statement that, starting Tuesday, 18 qualified commer

cial banks, including State-owned banks, city and rural commercial banks and foreign banks, will report their lend

上海419ing reference rate every month. Analysts expect the first loan prime rate will be much lower than the current 4.35 per

cent one-year benchmark lending rate, which has been unchanged since August 2015.

The statement said commercial banks will be allo上海419

wed to float the lending rates up by certain percentage points above the medium-ter

上海419女神会所m lending facility rate of the central bank. The medium-term lending rate is the cost that commercial banks sho

uld pay for borrowing from the central bank, and it was set at 3.3 percent on Thursday.

Sheng Songcheng, a central bank adviser and former head of the PBOC’s

statistics department, said the reform will help keep lending rates lower.

Moreover, the changes will enable the PBOC to effectively influence Chin上海419女神会所

a’s entire interest rate system by selling or buying financial instruments on the open

market, much like how Western central banks implement monetary policy, Sheng said.

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