[Breaking News] China Effectively Holds Benchmark LPR Steady for 16th Consecutive Month

[Asia Economy Reporter Kim Suhwan] China has effectively kept its Loan Prime Rate (LPR), which functions as the benchmark interest rate, unchanged for 16 consecutive months.

On the 20th, the People's Bank of China announced the 1-year and 5-year LPR at 3.85% and 4.65%, respectively, the same as the previous month. The LPR has remained at this level for 16 months since it was cut by 0.20 percentage points (for the 1-year term) in April last year, when COVID-19 was at its peak.

The LPR announced by the People's Bank of China, which all financial institutions in China use as the standard for corporate and household loans, effectively serves as the benchmark interest rate. The LPR is the average of the best loan rates reported by 18 commercial banks in China and is calculated by adding banks' funding costs and risk premiums to the 1-year Medium-term Lending Facility (MLF) rate.

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