China’s loan prime rate (LPR) has just seen a decline following recent cuts to rates for one of the Chinese central bank’s key open market instruments.
On 20 April the People’s Bank of China (PBOC) announced that the one-year LPR is 3.85% and the five-year LPR is 4.65%.
The one-year LPR fell by 20 basis points compared to the March reading of 4.05%, while the five-year LPR fell by 10 basis from 4.75%.
The decline follows a drop in rates for the Chinese central bank’s one-year medium-term lending facility (MLF) amidst efforts by Beijing to improve liquidity to stymie the economic fallout of the COVID-19 pandemic.
On 15 April PBOC injected 100 billion yuan via one-year MLF facilities at a rate of 2.95%, for a reduction of 20 basis points compared to the last MLF sale at 3.15%.