China's one-year loan prime rate drops

Source: Xinhua | 2020-02-20

China's one-year loan prime rate (LPR) came in at 4.05 percent Thursday, down from 4.15 percent a month earlier, according to the National Interbank Funding Center.

The above-five-year LPR fell 0.05 percentage points from the previous reading to 4.75 percent.

China's central bank announced a plan to reform the LPR mechanism in August 2019, to better reflect market changes in its latest move to guide borrowing costs lower to support the real economy.

Under the revamped mechanism, the LPRs, released on the 20th day of every month, are based on rates of the central bank's open market operations, especially the medium-term lending facility rates.

The first new one-year LPR, released on Aug. 20 last year, stood at 4.25 percent, 10 basis points lower than the central bank benchmark lending rate, while the first new above-five-year LPR was slightly lower than the 4.9-percent central bank benchmark rate.