China Holds Benchmark Interest Rate Steady for 11th Consecutive Month
[Asia Economy Reporter Bu Aeri] China has kept the Loan Prime Rate (LPR), the benchmark interest rate, unchanged for 11 consecutive months.
According to the People's Bank of China, the central bank, the 1-year and 5-year LPRs as of March 22 were recorded at 3.85% and 4.65%, respectively, the same levels as the previous month.
The LPR has remained at the same level for nearly a year since April of last year.
Although China has an official benchmark interest rate, all financial institutions in China use the People's Bank of China's announced LPR as the standard for corporate and household loans, making the LPR the de facto benchmark interest rate.
In the first half of last year, when the economy was hit by the spread of COVID-19, China implemented high-intensity stimulus policies encompassing monetary and fiscal measures, such as inducing policy rate cuts including the LPR and repeatedly lowering the reserve requirement ratio to significantly increase liquidity supply.
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As China's economy has entered a full recovery phase, the country is implementing an exit strategy from this year to gradually reduce the intensity of economic stimulus, concerned about the aftereffects of artificial economic boosting.
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