August 19, 2019 / 1:35 AM / 2 months ago

China's new loan prime rate to be linked to MLF rate - adviser

BEIJING, Aug 19 (Reuters) - China’s new loan prime rate (LPR) will be linked to the central bank’s medium-term lending facility (MLF) rate, People’s Bank of China policy adviser Ma Jun was quoted by state media as saying on Monday.

China’s central bank unveiled a key interest rate reform on Saturday to help steer borrowing costs lower for companies and support a slowing economy that has been hurt by a trade war with the United States.

The central bank said it will improve the mechanism used to establish the LPR from this month, in a move to further cut real interest rates for companies as part of broader market reforms.

Chinese banks’ new LPR quotations will be based on rates of open market operations, the PBOC said over the weekend. The national interbank funding centre will publish the rate from Tuesday and on the 20th day of each month thereafter. (Reporting by Kevin Yao and Beijing Monitoring Desk; Editing by Sam Holmes)

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