New Zealand economic growth data for Q4 2024 kicks the calendar off today. The New Zealand economy is, slowly, on the turn better after a string of 3*50bp interest rate cuts from the Reserve Bank of New Zealand.
The People's Bank of China Loan Prime Rate (LPR) setting is today. The sting has gone out of this, the Bank now use its 7-day repo rate as it main policy tool. This is currently at 1.5%. I've popped up more detail on this - scroll down if interested.
This snapshot from the ForexLive economic data calendar, access it here.The times in the left-most column are GMT.The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.
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Shift to the 7-Day Reverse Repo Rate as the Main Policy Rate:
The 7-day reverse repo rate is pivotal in the PBoC's open market operations, where it provides short-term liquidity to commercial banks. By focusing on this rate, the PBoC seeks to exert more direct influence over short-term market interest rates, thereby enhancing the responsiveness of financial institutions to policy changes.
In line with this new framework, the PBoC made several rate adjustments:
September 2024: The rate was further lowered by 20 basis points to 1.5%, marking the lowest level on record since at least 2012.
Changes to the Loan Prime Rate (LPR) and MLF Setting Dates:
Loan Prime Rate (LPR): Previously, the LPR was closely linked to the MLF rate. With the shift to the 7-day reverse repo rate as the main policy rate, the PBoC aimed to reform the LPR setting mechanism to better reflect market rates and improve the transmission of monetary policy.
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In October 2024 the PBOC cut the one-year LPR to 3.1% and the five-year LPR to 3.6%.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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