USD/CNH remains near the middle of its multi-month range as China keeps key loan rates and the 7-day reverse repo unchanged. Authorities are reportedly considering mortgage subsidies and tax incentives to support the struggling housing market, though previous measures have had limited impact, BBH FX analysts report.

China keeps loan prime rates unchanged for sixth month

"USD/CNH is trading near the middle of a multi-month range between 7.0850 and 7.1500. China’s commercial banks left the 1 and 5-year loan prime rates unchanged for a sixth month at 3.00% and 3.50%, respectively. That was to be expected given that the PBOC has held the policy-relevant 7-day reverse repo rate at 1.40% since the 10bps cut in May."

"Meanwhile, according to Bloomberg News, China is considering new measures to support its struggling property market. The measures include offering mortgage subsidies for new homebuyers nationwide, raising income-tax rebates for mortgage borrowers, and lowering home transaction costs."

"However, previous support measures have done little to lift a housing market burdened by a supply glut."