Standard Chartered analyst’s note that according to the statement from the People’s Bank of China (PBoC) dated 16 August, the loan prime rate (LPR) will replace the conventional benchmark loan rate (BLR) as the main reference rate for new bank loans, effective immediately. Key Quotes “The following major changes have been made as part of the LPR reform: 1. Publish the new LPR at 09:30 on the 20th of each month, rather than daily 2. Expand the number of LPR submission banks to 18 from 10 3. New LPR to be quoted with reference to the 1-year medium-term lending facility (MLF) plus a spread, no longer linked with the BLR 4. Introduce a new 5-year LPR for mortgage and long-term loan pricing 5. Revise macro-prudential assessment (MPA) criteria to ensure new loans are priced on the LPR and banks do not set an implicit floor for the lending rate.” “LPR reform will have the following major effects on banks and markets, in our view: 1. Better pass-through of PBoC’s policy rates to banks’ lending rate via the revised LPR and MLF operations, leading to lower financing costs for corporates 2. Pick-up in banks’ demand for bonds as returns on loans fall; 3. Likely fall in deposit and wealth management product (WMP) rates over time as banks are under pressure to protect their net interest margins (NIMs) 4. We expect the PBoC to cut the reserve requirement ratio (RRR) and MLF rate in 2019 to alleviate pressure on banks’ NIMs and return on equity (ROE), and achieve sustainable credit growth 5. The PBoC will need to conduct MLF operations more frequently and broaden the scope of collateral to improve the influence of MLF on banks’ funding costs 6. Demand for LPR hedging is expected to pick up strongly 7. The concept of funds transfer pricing (FTP) will be enhanced.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next EUR/JPY gyrates around 118.50 sustained by risk appetite FX Street 3 years Standard Chartered analyst's note that according to the statement from the People's Bank of China (PBoC) dated 16 August, the loan prime rate (LPR) will replace the conventional benchmark loan rate (BLR) as the main reference rate for new bank loans, effective immediately. Key Quotes "The following major changes have been made as part of the LPR reform: 1. Publish the new LPR at 09:30 on the 20th of each month, rather than daily 2. Expand the number of LPR submission banks to 18 from 10 3. New… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.