China’s revamped national loan prime rates (LPRs) were released with the one-year rate coming in at 4.25%, down from the previous rate of 4.31%, and below the one-year benchmark lending rate of 4.35%, reported Caixin.
The five-year LPR came in at 4.85%, five basis points lower than the benchmark rate for loans with maturities longer than five years.
The People’s Bank of China (PBoC) has ordered commercial banks to set loan rates going forward based on the new LPRs rather than use the central bank’s own benchmark lending rates as a reference. The PBoC has vowed to liberalize how banks price loans, aiming in part to lower borrowing costs for companies.