China's Benchmark Interest Rate LPR Holds Steady for 4th Consecutive Month

Successful Economic Rebound... Caution on Fiscal Policies Including Liquidity Supply

[Asia Economy Beijing=Special Correspondent Jo Young-shin] China has kept the Loan Prime Rate (LPR), its benchmark interest rate, unchanged for the fourth consecutive month.

According to the People's Bank of China, the central bank, the 1-year and 5-year LPRs were recorded at 3.85% and 4.65%, respectively, the same as the previous month.

The People's Bank of China had signaled the LPR freeze by keeping the 1-year Medium-term Lending Facility (MLF) loan rate, which influences the LPR, unchanged on the 15th.

The LPR is the average of the best loan rates reported by 18 commercial banks in China, calculated by adding banks' funding costs and risk premiums to the 1-year MLF rate.

Having succeeded in a rebound of the economy, Chinese financial authorities are expected not to use fiscal policy for the time being.

On the 17th, the State Council of China held an executive meeting chaired by Premier Li Keqiang, stating, "We will continue to reasonably meet liquidity needs but will not engage in 'Daesu Manguan' (filling farmland with water, a metaphor for excessive liquidity supply)," expressing caution against excessive liquidity provision.

This content was produced with the assistance of AI translation services.