People’s Bank of China 125bn yuan of 1 year Medium-term Lending Facility (MLF), 2.5%

The MLF rate setting sets the scene for the Loan Prime Rate (LPR) setting coming up on the 20th.

The unchanged rate, at 2.5%, for the MLF strongly suggests the one- and five-year LPRs will remain at the same rates also:

• 3.45% and 3.95% respectively

This is usually (not always) a reliable guide that LPR rates will remain unchanged. That didn’t happen in February. The MLF was unchanged in February but we got a big cut to the 5-year LPR.

• PBOC Rate CUT ___ (LPR): 1-year 3.45% (prior 3.45%) 5-year 3.95% (prior 4.20%)
• The 1 year rate was last changed in August 2023: PBOC Loan Prime Rates (LPR) CUT: 1-year 3.45% (prior 3.55%) & 5-year 4.2% (prior 4.20%)

This article was written by Eamonn Sheridan at www.forexlive.com.