China Central Bank may lower base lending rate on Friday

US, WASHINGTON (ORDO NEWS) — China is expected to lower its base lending rate on Friday to help the economy affected by the coronavirus, a survey of traders and analysts showed.

40 respondents, or 71.4% of all survey participants, are expecting lower base rates for first-class borrowers (LPR). Another 16 respondents predict that the rate will remain unchanged.

Among those who expect a reduction in LPR, 36 forecast a decrease in the rate on annual loans by 5 or 10 basis points and a five-year LPR level. Reducing rates can lead to lower borrowing costs for companies and consumers in the real economy.

On Monday, the People’s Bank of China unexpectedly left the medium-term lending rate at the same level, despite an extraordinary reduction in the rate by the Federal Reserve by 100 basis points to counter the economic consequences of the outbreak of coronavirus.

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