China cuts 1-year prime loan interest rate

In an effort to support the economy, the People’s Bank of China (PBOC) also lowered its one-year prime lending rate but surprised markets by leaving the five-year rate unchanged. The People’s Bank of China (PBOC) cut the one-year prime lending rate (LPR) by 10 basis points to 3.45%, but kept the five-year LPR at 4.2%. Economists had forecast a cut to both rates. The move also follows the PBOC’s announcement last week of medium-term credit facility (MLF) and standing credit facility (SLF) rates. The one-year MLF rate was cut to 2.5% from 2.65%, while the seven-day reverse repo rate was cut to 1.8% from 1.9%.