PBoC: No changes expected at its meeting – UOB

Lee Sue Ann, Economist at UOB Group, expects the PBoC to keep the LPR unchanged at this week’s meeting.

Key Quotes

“Monetary policy support is likely to be stepped up as recent economic data pointed to sharply weaker outlook in 2H21.”

“While we expect the PBoC to cut banks’ reserve requirement ratio (RRR) by another 50 bps before year-end, the 1Y LPR and the 5Y & above LPR are likely to be kept unchanged for the rest of 2021 at 3.85% and 4.65%, respectively, given PBoC’s concerns of financial imbalances.”