The People’s Bank of China (PBOC) today left the benchmark one-year lending rate (LPR) unchanged at 3.7% and the benchmark five-year lending rate at 4.6%.
The one-year LPR in China is a measure of the private lending rate.
The 5-year LPR rate is an index that measures the evolution of household interest rates, including mortgage rates.
The People’s Bank of China had previously cut its one-year LPR rate by 0.10% from 3.80% to 3.7% and the five-year LPR rate by 0.05% from 4.65% to 4.6%.
The cut should support economic recovery and increase liquidity in the financial system.
The National Interbank Fundraising Center, an organization affiliated with the People’s Bank of China, publishes the level of the LPR interest rate every month. The measure represents an improvement and reform of the mechanism for setting the LPR lending rate and is the latest attempt to reduce borrowing costs in order to stimulate the economy.