China's Loan Prime Rate (LPR), the country's new benchmark interest rate, was lowered by 5 basis points to 4.20 percent and is now 11 points lower than in August when it was introduced.
On Aug. 17 the People's Bank of China (PBOC) reformed its system for setting LPR in an effort to improve the transmission of its monetary policy, lower the cost of financing, and made it the pricing benchmark for all types of loans by commercial lenders instead of its lending rate.
LPR, the average of prices submitted by 18 banks, currently comprises two varieties, a 1 year and a 5 year, and is published on the 20th of each month.
On Aug. 20 LPR was published for the first time since the reform of LPR and set at 4.25 percent, 6 basis points below the 4.31 percent it had been since it was introduced in October 2013, and 10 points below the lending rate's 4.35 percent. The 5-year rate was set at 4.85 percent.
Today PBOC's website showed a graph with the 1 year LPR at 4.20 percent for September, down from 4.25 percent in August and 4.35 percent in July.
The 5-year LPR was unchanged at 4.85 percent from August.
www.CentralBankNews.info
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