Overview

• The central bank kept the one- and five-year loan prime rates unchanged at 3% and 3.5%, a hold widely forecast by market participants.
• The PBOC’s second-quarter report pledged a moderately loose stance that keeps liquidity abundant and lowers overall financing costs.
• Policymakers stressed improving fund utilization and preventing idle capital circulation to ensure money reaches the real economy.
• Central bank data showed deposits at nonbank financial institutions jumped by 2.14 trillion yuan in July, indicating faster flows into the stock market.
• Economists see limited odds of near-term RRR or benchmark rate cuts due to firmer core inflation, with any broader easing later this year dependent on incoming data and global policy signals.