In China, there has been no change in the 1 and 5-year loan prime rates (LPR) that serve as benchmark interest rates. The China National Interbank Funding Center reported that the 1-year loan interest rate remains at 3.1%, while the 5-year loan interest rate is kept steady at 3.6%. LPR, determined based on the margin notifications set by the 18 banks in China on top of the lending rate by the People’s Bank of China (PBoC), has been serving as the country’s benchmark interest rate since 2019. The 1-year loan interest rate serves as a reference for corporate loans, while the 5-year interest rate is considered for real estate loans.

THREE RATE CUTS WERE MADE
As part of the policy measures by the People’s Bank of China to stimulate economic growth, three rate cuts were made in 2024 on loan interest rates. In February 2024, to boost the crisis-hit real estate sector, the 5-year loan interest rate that serves as a reference for real estate loans was reduced from 4.20% to 3.95%, while the 1-year interest rate remained at 3.45%. In July 2024, rate cuts were made on both loan interest rates, with the 1-year rate dropping from 3.45% to 3.35% and the 5-year loan interest rate decreasing from 3.95% to 3.85%. In October 2024, there was another cut in loan interest rates, with the 1-year rate falling from 3.35% to 3.1% and the 5-year loan interest rate dropping from 3.85% to 3.6%.