People's Bank of China (PBoC) reported that the loan prime rates (LPR) will remain at the same level. This decision confirmed the experts' expectations. In addition, the rate has remained unchanged for the 19th month in a row.
The Central Bank reported that the annual basic interest rate on loans remained at 3.85%, while the five-year LPR rate was maintained at 4.65%. The rates were last changed in April 2020 - the annual rate was reduced by 0.2%, and the five-year rate was reduced by 0.1%.
The main loan rate is fixed monthly based on the submission of 18 banks, although Beijing has an influence on setting rates.
Meanwhile, economists note that as economic strains increase, the PBoC will be under pressure to reduce the burden on borrowers-debtors, which may cause a reduction in the five-year LPR rate, with which prices for mortgage loans are set.