China Keeps De Facto Benchmark LPR Unchanged for Fifth Month: 1-Year at 3.0%, 5-Year at 3.5%

On October 20, the People's Bank of China kept the Loan Prime Rate (LPR), which effectively serves as the benchmark interest rate, unchanged for the fifth consecutive month.

The central bank announced that the five-year LPR, which serves as the benchmark for mortgage loans, would remain at 3.5%, while the one-year LPR, the standard for general loans, would be maintained at 3.0%.

People's Bank of China. Yonhap News Agency

This outcome matches the expectations compiled by Reuters from a recent survey of 27 market experts.

In May, as pressure mounted for economic stimulus due to tariff conflicts with the Donald Trump administration in the United States, the People's Bank of China lowered both the five-year and one-year LPR by 0.1 percentage points each, marking the first cut in seven months. Since then, despite the U.S. Federal Reserve's rate cuts, the bank has maintained its cautious stance by holding rates steady for five consecutive months through October.

China calculates the LPR each month by aggregating the lending rates of 20 major commercial banks, taking into account their own funding costs and risk premiums. Although a separate benchmark interest rate exists, it has remained unchanged for a long time, making the LPR the de facto benchmark rate.

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