The People’s Bank of China has essentially gained control of all lending rates in the world’s second largest economy and, potentially, could engineer a modest rate cut. Photo: Reuters

China’s central bank now has ‘bigger say’ over lending rates, but analysts question level of impact

  • The People’s Bank of China now requires banks to benchmark their loan rates against the medium-term lending facility instead of the official benchmark
  • The change is part of a long-term modernisation process within the world’s second largest economy to have a market-oriented central banking mechanism
Topic |   China economy

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The People’s Bank of China has essentially gained control of all lending rates in the world’s second largest economy and, potentially, could engineer a modest rate cut. Photo: Reuters
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The central bank will calculate the average of those rates and publish it at 9.30am on the 20th of every month, starting from Tuesday, as the benchmark rate for the whole banking industry to follow. Photo: Xinhua

China changes the way bank loan rates are set, with HSBC left out of rate-setting club

  • Chinese central bank selects 18 lenders, including two foreign ones, to submit monthly rates that will be used to determine benchmark
  • People’s Bank of China says it will lower financing costs for corporate and individual borrowers
Topic |   China economy

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The central bank will calculate the average of those rates and publish it at 9.30am on the 20th of every month, starting from Tuesday, as the benchmark rate for the whole banking industry to follow. Photo: Xinhua
READ FULL ARTICLE