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China says previous 1-year benchmark lending rate may not be changed in near term

BEIJING, Aug 20 (Reuters) – China’s central bank vice governor Liu Guoqiang said on Tuesday that the future interest rate policy focus would be on new Loan Prime Rate (LPR) reforms and that 1-year policy benchmark rates may not be changed in the near term.

There is room for cuts in both the banks’ reserve requirement ratios (RRR) and lending rates, Liu told a group of reporters after a briefing.

China switched to a revamped LPR lending benchmark rate on Tuesday for banks to use when setting rates on new loans, instead of the central bank’s existing benchmark one-year lending rate.

But China will not scrap the benchmark lending rate for the time being, said Liu, adding that policymakers still need time to observe effects of LPR reform. (Reporting by Yawen Chen and Kevin Yao)

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