China’s one-year loan prime rate (LPR), a market-based lending rate, came in at 3.35 percent Tuesday, remaining unchanged from July.
The over-five-year LPR, on which many lenders base their mortgage rates, also remained unchanged from the previous reading of 3.85 percent, according to the National Interbank Funding Center.
The monthly-released data serves as a pricing reference for banks and is based on rates of the People’s Bank of China’s open market operations.
<img src='https://news.cgtn.com/news/2024-08-20/China-s-LPR-remains-stable-in-August-1wdBcoA87Ys/img/6a617152a3d644b3af904eb032fccb8d/6a617152a3d644b3af904eb032fccb8d.png' alt='People's Bank of China Headquarters, Beijing, China./ CFP'
Coming in line with market expectations, July saw China’s central bank confirm several reforms to its interest rate framework, shifting from using the previous LPR precursor to shorter-term seven day reverse repurchase agreements.
Commenting on recent LPR changes and adjustments, Bruce Pang, head of research at JLL Greater China, told CGTN the foundation for economic recovery in China still needs to be consolidated.
Pang added that the reforms in the loan interest rate and adjustment of the market-orientated mechanism of deposit interest rate remains a focus of economic work, emphasizing on the necessity to achieve a stable and steady decline in corporate financing expenses and household credit costs.
