Prime loan rates in China remain unchanged

Headquarters of the People’s Bank of China in Beijing. / VCG

Headquarters of the People’s Bank of China in Beijing. / VCG

China’s one-year loan prime rate (LPR), a market-based benchmark lending rate, stood at 3.85% on Monday, unchanged from the previous month.

The five-year LPR, on which many lenders base their mortgage rates, also remained unchanged from the previous reading of 4.65%, according to the National Interbank Funding Center.

This was in line with the expectations of the majority of analysts in a Reuters poll conducted last week.

Strong expectations for a stable LPR came as China kept the cost of borrowing on one-year Medium Term Loans (MLFs) unchanged last week.

The MLF is one of the main tools for managing long-term liquidity in the country’s banking system and serves as a guide for the LPR.

The LPR is a benchmark loan rate set monthly by 18 banks.

Some analysts have said that the stance of China’s central bank monetary policy is unlikely to be affected by a hawkish shift in its US counterpart, as the Fed advanced its projections for the first post-interest rate hikes. pandemic in 2023.

(With the contribution of the agencies)

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