China’s Benchmark Loan Prime Rate Remains Unchanged in July


The latest benchmark rates announced by China’s financial authorities have remained unchanged compared to the preceding month. 

The loan prime rates (LPR’s) announced by Chi­na’s Na­tional In­ter­bank Fund­ing Cen­ter (全国银行间同业拆借中心) on 20 July were 3.7% for the 1-year LPR and 4.45% for the 5-year LPR, both of which are the same as the LPR’s announced in June.

The prints are consistent with consensus expectations, although some domestic observers anticipate moderate declines in the 5-year LPR in future given uncertainty in the Chinese real estate market and the prioritisation of stable growth by Beijing.

On 15 July PBOC undertook 100 billion yuan in medium-term lending facility (MLF) operations and 3 billion yuan in reverse repo operations, for the purposes of “maintaining rationally ample liquidity in the banking system.”

The MLF rate for the month was 2.85%, holding steady with the reading for June. Analysts said that the MLF rate remaining steady in July meant that the LPR would be unlikely to shift this month, while the 5-year LPR has already declined by a sizeable 15 basis points in May.

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.