China loan rate cuts ‘not over yet’ despite keeping lending benchmark unchanged in March

China’s one-year loan prime rate (LPR) remained unchanged at 3.70 per cent, the People’s Bank of China (PBOC) said on Monday

The five-year LPR, which is the reference for mortgages, also remained unchanged at 4.65 per cent

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China’s one-year loan prime rate (LPR) remained unchanged at 3.70 per cent, the People’s Bank of China (PBOC) said on Monday, while the five-year LPR, which is the reference for mortgages, also remained unchanged at 4.65 per cent. Photo: AFP

Published: 9:20am, 21 Mar 2022Updated: 12:22pm, 21 Mar 2022

China kept its benchmark lending rate unchanged despite concerns over a cooling economy, the central bank confirmed on Monday, but further easing is expected.

The one-year loan prime rate (LPR) – on which most new and outstanding loans are based – remained at 3.70 per cent at the March fixing.

The five-year LPR – which is a reference rate for mortgages – also remained unchanged at 4.65 per cent, according to the People’s Bank of China (PBOC).

Among 36 financial institutions surveyed in a snap Reuters poll last week, just over half said they expected China’s LPR and the five-year rate to remain unchanged.

The current round of LPR cuts is not been over yet, there is room for a reduction of 10 to 15 basis points in the second quarter

It follows the US Federal Reserve raising its short-term benchmark rate last week to a target range of 0.25 to 0.5 per cent after two years of holding borrowing costs near zero to insulate the economy from the coronavirus pandemic.

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