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People’s Bank of China (PBOC) Vice Governor Liu  was on the wires last minutes, via Reuters, with the key headlines found below.

China will not scrap benchmark lending rate for the time being.

China still needs time to observe effects of LPR reform.

Future interest rate policy focus will be on the LPR, benchmark rates may not be changed in near term.

There is room for cuts in both the reserve requirement ratio and lending rate.

Interest rate differential between US and China poses no pressure on the yuan.

Urgency for interest rate reform due to China – US trade war, industrial transformation, rate cuts from global central banks.

Markets remain cautious, as they assess the impact of the Chinese lending rate reform, effective today, with the Yen trading on the front foot while Asian equities hold moderate gains.