The People's Bank of China decided on December 28th 2019 to start using the key loan prime rate (LPR) as a new benchmark for pricing outstanding floating-rate loans. From January 1st 2020, financial institutions will not be allowed to sign floating-rate loan contracts that are priced in the old rates but should use the LPR instead. The move is expected to lower borrowing costs and is seen as another measure toward interest-rate liberalisation. The one-year LPR is at 4.15% and the 5-year LPR, generally used for new mortgage loans, at 4.8%. The central bank last cut the two rates by 5bps each last month, aiming to reduce lending costs and boost a slowing economy. Since the one-year LPR became the official key rate in August 2019, it was already cut 3 times. Interest Rate in China averaged 4.67 percent from 2013 until 2020, reaching an all time high of 5.77 percent in April of 2014 and a record low of 4.15 percent in November of 2019. source: People's Bank of China

Interest Rate in China is expected to be 3.95 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in China to stand at 3.65 in 12 months time. In the long-term, the China Loan Prime Rate is projected to trend around 4.00 percent in 2020, according to our econometric models.

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China Loan Prime Rate

Actual Previous Highest Lowest Dates Unit Frequency
4.15 4.15 5.77 4.15 2013 - 2020 percent Daily


Calendar GMT Actual Previous Consensus TEForecast
2019-09-20 01:30 AM 4.2% 4.25% 4.15%
2019-10-21 01:30 AM 4.20% 4.20% 4.05%
2019-11-20 01:30 AM 4.15% 4.2% 4.2% 4.1%
2019-12-20 01:30 AM 4.15% 4.15% 4.05%
2020-01-20 01:30 AM 4.15% 4.05%


News Stream
2019-12-30
China Switches to LPR for Floating-Rate Loans
The People's Bank of China decided on December 28th 2019 to start using the key loan prime rate (LPR) as a new benchmark for pricing outstanding floating-rate loans. From January 1st 2020, financial institutions will not be allowed to sign floating-rate loan contracts that are priced in the old rates but should use the LPR instead. The move is expected to lower borrowing costs and is seen as another measure toward interest-rate liberalisation. The one-year LPR is at 4.15% and the 5-year LPR, generally used for new mortgage loans, at 4.8%. The central bank last cut the two rates by 5bps each last month, aiming to reduce lending costs and boost a slowing economy. Since the one-year LPR became the official key rate in August 2019, it was already cut 3 times.

2019-12-20
China Leaves Key LPRs Steady
The People's Bank of China left its benchmark 1-year Loan Prime Rate (LPR) unchanged at 4.15 percent on December 20th 2019. The 5-year LPR, generally used for new mortgage loans, was also left on hold at 4.8 percent. The central bank last cut the two rates by 5bps each last month, aiming to reduce lending costs and boost a slowing economy. Since the one-year LPR became the official key rate in August 2019, it was already cut 3 times. The central bank says he pursues its monetary policy "neither too tight nor too loose" while maintaining market liquidity at a reasonably ample level but markets expect the PBoC to adopt an easier monetary policy stance in 2020 amid a slowing economy. Yet, the central bank has conducted two reverse repurchase agreements this month; the second biggest so far in 2019 was made the day before, with a CNY 280 billion pump.

2019-11-20
China Cuts New Benchmark Lending Rate
The PBoC lowered its one-year Loan Prime Rate by 5bps to 4.15 percent on November 20th 2019, aiming to reduce lending costs and boost a slowing economy. It is the third rate cut since the one-year LPR became the official key rate in August and follows other recent declines in borrowing costs, despite pressures on inflation from rising pork prices from an outbreak of African Swine Fever. The five-year Loan Prime Rate, generally used for new mortgage loans was also slashed by 5bps to 4.8 percent. Earlier on Monday, the PBoC trimmed its seven-day reverse repurchase rate to 2.5 percent from 2.55 percent, the first cut in over 4 years and two weeks ago the medium-term lending facility was lowered to 3.25 percent from 3.3 percent.

2019-11-05
China Cuts Lending Rate for 1st Time Since 2016
The People's Bank of China (PBOC) lowered the rate on one-year MLF loans (medium-term lending facility) by 5 basis points to 3.25 percent on November 5th 2019. It is the first reduction since early 2016, as policymakers seek to support a slowing economy hit by weaker demand at home and abroad. The bank also injected 400 billion yuan (US$56.94 billion) into the financial system replacing 403.5 billion yuan of loans that mature Tuesday. The MLF rate acts as a guide for the PBOC’s new lending benchmark, the Loan Prime Rate (LPR).

2019-10-21
China Keeps LPR Lending Benchmark Unchanged
China set the one-year Loan Prime Rate (LPR) at 4.20 percent in October, steady from the previous monthly fixing. Meanwhile, the five-year LPR was fixed at 4.85 percent, also unchanged from September.

2019-09-20
China 1-Year Loan Prime Rate Set at 4.2%
China's one-year loan prime rate (LPR) was set at 4.2 percent in on September 20th, down from 4.25 percent in the previous month, the People's Bank of China (PBOC) said in a statement on its website. The reduction came after the central bank lowered banks' reserve requirements by 50 basis points on Monday to support the economy and after the Federal Reserve slashed US interest rates for the second straight month this year. Meantime, the five-year LPR was unchanged at 4.85 percent.


China Loan Prime Rate
The People’s Bank of China (PBOC) on August 17th, 2019, designated the Loan Prime Rate (LPR) the new lending benchmark for new bank loans to households and businesses, replacing the central bank’s benchmark one-year lending rate. The rate is based on a weighted average of lending rates from 18 commercial banks, which will submit their LPR quotations, based on what they have bid for PBOC liquidity in open market operations, to the national interbank funding center before 9am CST on the 20th of every month.

China Money Last Previous Highest Lowest Unit
Interest Rate 4.15 4.15 5.77 4.15 percent [+]
Cash Reserve Ratio 13.00 12.50 21.50 6.00 percent [+]
Money Supply M0 7720.00 7397.38 8747.06 17.85 CNY Billion [+]
Money Supply M1 57600.00 56248.65 57600.00 74.51 CNY Billion [+]
Interbank Rate 3.07 3.17 9.89 0.00 percent [+]
Money Supply M2 198650.00 196142.96 198650.00 5840.10 CNY Billion [+]
Foreign Exchange Reserves 3108000.00 3095591.00 3993212.72 2262.00 USD Million [+]
Central Bank Balance Sheet 363075.36 359640.48 372492.06 34443.90 CNY HML [+]
Banks Balance Sheet 1140.00 1390.00 3230.00 -32.10 CNY Billion [+]
Loans to Private Sector 21030.00 19937.00 46791.00 -974.00 CNY HML [+]
Deposit Interest Rate 0.35 0.35 3.15 0.35 percent [+]
Loan Growth 12.30 12.40 34.44 10.60 percent [+]
Lending Rate 4.35 4.35 12.06 4.35 percent [+]
Loans To Banks 1514503.44 1500604.13 1514503.44 413413.10 CNY HML [+]
Reverse Repo Rate 2.50 2.50 4.40 2.25 percent [+]
Fixed Asset Investment 5.40 5.20 53.00 5.20 percent [+]