The Chinese mainland has maintained its market-based one-year loan prime rate (LPR) at 3.35 percent for August, unchanged from the previous month, according to a statement by the National Interbank Funding Center under the People’s Bank of China (PBOC).
Similarly, the over-five-year LPR, which many lenders use as a benchmark for mortgage rates, remained steady at 3.85 percent. These rates serve as key pricing references for banks, derived from the PBOC's open market operations.
Wen Bin, chief economist at China Minsheng Bank, indicated that there may still be room to lower the LPRs this year. He highlighted that the U.S. Federal Reserve's recent rate cut, the first in over four years, creates additional flexibility for China’s monetary policy adjustments.
Wen emphasized that China's economic fundamentals are showing signs of slowing down. Lowering the LPRs could help reduce the financing costs for the real economy and promote the recovery of domestic demand. Additionally, rate cuts are expected to boost market confidence and economic vitality, aiding China in achieving its economic targets.
Reference(s):
cgtn.com
