China's loan prime rates remain unchanged

BEIJING -- China's one-year loan prime rate (LPR), a market-based benchmark lending rate, came in at 3 percent Tuesday, unchanged from the previous month.

The over-five-year LPR, on which many lenders base their mortgage rates, also remained unchanged from the previous reading of 3.5 percent, according to the National Interbank Funding Center.

LPRs, published each month, reflect financing costs for households and businesses and serve as a pricing reference for bank lending. Lower rates can ease borrowers' financing burdens and encourage investment and consumption.

China's one-year and over-five-year LPRs have remained unchanged for 17 consecutive months since June 2025.

The steady LPR rates came after China's gross domestic product grew 4.5 percent year-on-year in the third quarter of 2026, while new quality productive forces, represented by high-tech manufacturing, are developing at an accelerated pace, according to Golden Credit Rating.

Against this backdrop, broad-based monetary policy has maintained its current stance, it noted, adding that following the rollout of structural measures to stabilize growth and support the housing market, the economy will now enter a policy-effect observation period, and the pricing foundation of the LPR is expected to remain stable.

At the opening of the Annual Conference of Financial Street Forum 2026 held Monday, Pan Gongsheng, governor of the People's Bank of China, said that the central bank will advance the reform of loan pricing benchmarks to transition from the LPR as the single benchmark to more diversified benchmarks for loan pricing.

Recently, under the guidance of the central bank, some financial institutions have reached agreement with their clients and started using market rates, such as the interbank overnight repo rate, as the pricing benchmark for floating-rate loans. "This move has not only been effective in meeting the diverse needs for loan pricing, but also helped improve the efficiency of monetary policy transmission," he said.

Data showed that the weighted average interest rate on newly issued corporate loans was below 3 percent in September 2026, about 0.2 percentage point lower than a year earlier, while the rate on newly issued personal housing loans remained unchanged at about 3.1 percent.

China will continue to implement a more proactive fiscal policy and adopt an appropriately accommodative monetary policy in 2026, this year's government work report noted.