SHANGHAI (Reuters) – China cut its lending benchmark loan prime rate (LPR) for the first time in 20 months at its December fixing on Monday, largely in line with market expectations.
The one-year LPR was lowered by 5 basis points to 3.80% from 3.85% previously, while the five-year LPR remained at 4.65%.
The reduction marks the first LPR cut since April 2020.
Twenty-nine out of the 40 traders and economists polled by Reuters last week predicted cuts in LPR, citing the need to aid a slowing economy, and easier monetary conditions.
Most new and outstanding loans in China are based on the one-year LPR. The five-year rate influences the pricing of mortgages.
(Reporting by Winni Zhou and Andrew Galbraith; Editing by Muralikumar Anantharaman)
