China’s central bank announced lower interest rates for new benchmarks used by lenders to price their loans on Wednesday, marking the third time this month that borrowing costs have come down as policymakers take cautious steps to shore up flagging economic growth, reported Caixin.
The five basis-point reduction in both the one-year and five-year-plus national loan prime rate (LPR) was widely expected by the markets after the People’s Bank of China (PBOC) shaved five basis points off the rate it charges banks to borrow under its medium-term lending facility (MLF) on Nov. 5 and cut the same amount from the interest rate on seven-day reverse repurchase agreements on Nov. 18.
The central bank announces the national LPR on the 20th of every month and the rate is determined by submissions from 18 commercial banks of their own internal LPRs. The one-year national LPR now stands at 4.15% and the five-year-plus national LPR is 4.8%, according to data from the China National Interbank Funding Center, an entity under the PBOC.
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