Economic Buzz: China Holds Interest Rates Steady

21 Mar 2022 , 12:13 PM

China left its benchmark lending rates unchanged on Monday. The one-year loan prime rate was retained at 3.70 percent and the five-year LPR, the benchmark for mortgage rates, was maintained at 4.60 percent. In January, the one-year loan prime rate was reduced by 5 basis points, which was the second consecutive reduction and the five-year LPR was lowered for the first time since April 2020. The loan prime rate is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. This lending rate replaced the central banks traditional benchmark lending rate in August 2019. Last week, the central bank had kept the rate on its one-year medium-term lending facility unchanged at 2.85 percent. The bank injected a net CNY 100 billion into the banking system.

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