PBoC: China’s rate reform is no reform at all
The People's Bank of China has thrown out a four-year-old lending rate and introduced two new references, but onshore bankers have doubts about what the central bank's change will achieve.
By Rebecca Feng
The PBoC’s lending rate reform needs to go further, say bankers
The People’s Bank of China (PBoC) has reformed the loan prime rate (LPR), turning what was previously a sideshow in the domestic monetary system into the main reference rate for loans. The new LPR will be updated monthly and will be based on indicative quotes from 18 banks’ loans to their prime clients, with both the highest and lowest figures removed.