People’s Bank of China Maintains Loan Prime Rates

The People’s Bank of China (PBOC) kept its benchmark loan prime rate unchanged on Friday, noting deteriorating economic conditions.

The PBOC maintained the one-year LPR at 3.35%, while the five-year LPR, crucial for mortgage rates, remained at 3.85%.

The last rate cut occurred in July as part of efforts to ease economic conditions and encourage growth. Both LPR rates continue to be at record lows.

Further cuts are anticipated in the coming months due to a lack of improvement in economic data, with China experiencing persistent deflation and weak private consumption.

The LPR is set by the PBOC based on input from 18 designated commercial banks and serves as a benchmark for lending rates nationally. The five-year rate significantly affects China’s property market, which has faced nearly four years of declining sales and a prolonged cash crunch.