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How China's new interest rate reforms will work
China’s central bank pushed out long-awaited interest rate reforms on Saturday by establishing a reference rate for new loans issued by banks to help steer corporate borrowing costs lower and support a slowing economy. The following explains how China’s new Loan Prime Rate (LPR), a central part of the reforms, will work. The LPR, originally introduced by the People’s Bank of China (PBOC) in October 2013, is an interest rate that commercial banks charge their best clients and was intended to better reflect market demand for funds than the benchmark the PBOC sets. However, the LPR’s moves since its launch have ... (full story)