“China is likely to continue pushing for lower financing costs in H2, including rates of bank lending and companies' capital raising, even after it left the LPR unchanged on Monday,” the Economic Information Daily reported, citing Chinese analysts.
Key highlights
“The broad cuts to banks' reserve ratios this month increased available capital, which may still lead to lower corporate loan rates later.”
“Policymakers may also have refrained from cutting rate after June's better-than-expected indicators showing manufacturing investment and consumption both improved.”
“The rising expectation of rate hike by the Federal Reserve may also have limited China, which seeks a more stable yuan.”
Related reads
- China keeps its 1-year loan prime rate unchanged at 3.85%, as expected
- China’s NDRC: Economic recovery still faces difficulties and challenges