China keeps lending benchmark LPR unchanged for 15th straight month in July

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Lujiazui financial district during sunset in Pudong, Shanghai
FILE PHOTO: People walk in Lujiazui financial district during sunset in Pudong, Shanghai, China July 13, 2021. REUTERS/Aly Song

July 20, 2021

SHANGHAI (Reuters) – China kept its benchmark lending rate for corporate and household loans unchanged at its July fixing on Tuesday, despite growing expectations for a cut after a surprise lowering of bank reserve requirements.

The one-year loan prime rate (LPR) was kept at 3.85%. The five-year LPR remained at 4.65%. The rate was unchanged for the 15th straight month.

Eleven traders and analysts, or 52.4% of 21 participants, in a snap Reuters poll conducted this week predicted no change in either rate, while the remaining 10 respondents all expected a cut to the one-year tenor.

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 Christopher Cushing)