Fifty traders, or 82% of the respondents, predicted a reduction in the Loan Prime Rate (LPR) at Friday's monthly fixing; 11 forecast no change. Most of those who predicted lower rates expect a cut of less than 10 basis points.
China's central bank is trying to guide borrowing costs lower to help an economy suffering from the U.S.-China trade war. The People's Bank of China (PBOC) lowered banks' reserve requirements on Monday, as global central banks rush to loosen their monetary policy.
The LPR is a lending reference rate set monthly by 18 banks. The PBOC revamped the mechanism to price LPR last month, loosely pegging it to the rate on the central bank's medium-term lending facility (MLF).
One-year LPR
Of the respondents in the Reuters poll, 23 forecast an LPR cut of 5 bps or less on Friday. Fifteen predicted a reduction of 6 to 10 bps. Only two expect LPR to fall by more than 10 bps.
A lower LPR could translate to lower borrowing costs for companies and consumers in a slowing economy.
(Reporting by Hongwei Li, Steven Bian, Fang Wu, Xiaochong Zhang and John Ruwitch; writing by Samuel Shen; editing by Larry King)