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China cuts lending benchmark LPR for first time since April 2020 -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO : Face-masking people walk by the People’s Bank of China headquarters, April 4, 2020. REUTERS/Tingshu Wang/File Photo

SHANGHAI (Reuters – China lowered its lending benchmark prime rate (LPR), Monday’s December fixation. It did so in large part in compliance with market expectations.

LPR on one-year was decreased by 5 basis points, to 3.80% (from 3.85%). The LPR on five-years remained at 4.65%.

This reduction is the first LPR decrease since April 2020.

Twenty-nine of the forty economists and traders polled last week by Reuters predicted LPR cuts, citing the necessity to help a slower economy and more monetary conditions.

The one-year LPR is the basis of most outstanding and new loans in China. Pricing of mortgages is affected by the five-year LPR.

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