The benchmark rate for the Chinese banking sector has held steady for the 16th consecutive month in the month of August.
The LPR’s issued by China’s National Interbank Funding Center (全国银行间同业拆借中心) on 20 August were 3.85% for the one year LPR and 4.65% for the five year LPR – the same as the readings for the preceding month.
China’s LPR’s have remained at the same level since April 2020, when the one year LPR fell by 20 basis points compared to the March reading of 4.05%, and the five year LPR fell by 10 basis points from 4.75%.
Zhou Maohua (周茂华), analyst from China Everbright Bank, said to the Chinese central bank’s official news outlet that China’s monetary and lending environment had remained “rationally moderate” in July given total social financing and M2 money supply growth.
“Looking at domestic and external economic conditions in the second half, moderate deployment of active fiscal policy is needed, and the central bank will provide targeted support to difficulties in the real economy, stimulating the activity of micro-actors.
“Keeping the LPR steady helps to stabilise market expectations.”
The LPR in China is the lending rate provided by commercial banks to their highest quality customers, and serves as the benchmark for rates provided for other loans.
The National Interbank Funding Center serves as the designated publisher of the LPR, and releases the figures at 9:30 am on the 20th of each month, after first collecting quotes from the group of reporting banks and calculating the average of these quotes following exclusion of the lowest and highest quotes.