Sources: PBOC to lower interest rates on Standing Lending Facility (SLF) – Reuters
Reuters quotes anonymous sources to signal the People’s Bank of China’s (PBOC) further actions during early Friday.
Key quotes
China central bank to lower interest rates on Standing Lending Facility for all tenors by 10 basis points on January 21.
Interest rates on overnight, 7-day and 1-month SLF loans to be lowered to 2.95%, 3.10%, 3.45%, respectively.
Elsewhere, China’s Forex Regulator also crossed wires via Reuters while saying, “China's forex market expected to show generally stable, more balanced development in 2022.”
“Two-way fluctuations in yuan to play role of 'automatic stabilizer' in market,” adds the news.
Market reaction
Even if the PBOC keeps trying to trim CNY gains, the USD/CNY prices eased from an intraday high to $6.3433 following the aforementioned news. It’s worth noting that the PBOC announced the first cut in the 5-year Loan Prime Rate (LPR), by 5 basis points (bps) to 4.60%, in 21 months on the previous day.
Read: PBOC sets USD/CNY reference rate at 6.3492