The Central Bank of China kept the base rate at 3.65% for the eighth month in a row

The People's Bank of China has again maintained the base interest rate on loans (LPR) for a period of one year at 3.65% per annum. The rate on five-year loans remained at 4.3% per annum. Thus, the Chinese Central Bank has not changed rates for eight consecutive meetings.

Analysts note that the decision not to change the value of the rate was quite expected, since last week the regulator kept the rate on loans under the medium-term lending program (MLF) at 2.75% per annum. 

MLF is an important credit instrument used by the Chinese Central Bank to provide liquidity to commercial banks, and directly affects its main LPR rate.

The last time the NBK changed the parameters of its monetary policy was in August 2022. Then the rate on annual loans was reduced by 5 basis points, for five–year loans - by 15 bps.

It is worth noting that LPR became a new benchmark in August 2019 after the Chinese Central Bank carried out interest rate reform. From 2020, the NBK requires banks to focus specifically on LPR when determining rates on new loans.