Economist Ho Woei Chen, CFA, at UOB Group, reviewed the recent decision by the PBoC to cut interest rates. Key Quotes “The People’s Bank of China (PBoC) cut the Loan Prime Rate (LPR) … after keeping it steady in the last two months… This follows the 10 bps cut to the 1Y Medium-term Lending Facility (MLF) rate to 3.15% on Monday (17 February) and similar moves on the 7-day reverse repo and 14-day reverse repo rates on 3 February, to 2.40% and 2.55% respectively.” “As the LPR is pegged to the MLF, a direct cut to the MLF rate clearly signals the PBoC’s intention to lower domestic funding costs including for longer tenor loans (i.e. 5Y & above LPR).” “After the cut, we still anticipate further lowering of the LPR to cushion the economy from the novel coronavirus (COVID-19) outbreak. For now, we expect the 1Y LPR to fall to 3.95% by end-1Q20 which factors in another 10bps cut in March. Consistent with our view of a peaking of COVID-19 cases by end-April, we expect a further 15bps cut to the 1Y LPR in 2Q20 (-10bps in April and -5bps in May) to bring the rate to 3.80% by 2Q20.” 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 BoJ’s Kuroda: BoJ shouldn’t have exactly the same view as the government FX Street 2 years Economist Ho Woei Chen, CFA, at UOB Group, reviewed the recent decision by the PBoC to cut interest rates. Key Quotes “The People’s Bank of China (PBoC) cut the Loan Prime Rate (LPR) … after keeping it steady in the last two months… This follows the 10 bps cut to the 1Y Medium-term Lending Facility (MLF) rate to 3.15% on Monday (17 February) and similar moves on the 7-day reverse repo and 14-day reverse repo rates on 3 February, to 2.40% and 2.55% respectively.” “As the LPR is pegged to the MLF, a direct cut to the MLF rate clearly… 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.