China has reduced a recently launched benchmark rate for the banking sector amidst concerns over borrowing costs and economic growth.
The National Interbank Funding Center announced on Wednesday 20 November that the one–year loan prime rate has been reduced to 4.15% from 4.2% the month previously, while the above-five-year LPR has been reduced to 4.8% from 4.85%.
The day previously Yi Gang (易纲), head of the Chinese central bank, called for “making effective use of the loan prime rate’s guiding function with regard to lending rates…and drive a decline in the rates for real loans.”
The loan prime rate (贷款市场报价利率) 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.
At present the LPR reporting group is comprised of 18 commercial banks in China, including an original core group of 10 national banks, plus two municipal commercial banks, two rural village commercial banks, two foreign invested banks and two privately operated banks.