After the central bank lowered key interest rates at the end of September as part of a series of actions meant to revive economic growth and prevent a property market crash, China lowered its benchmark lending rates.

The five-year LPR was lowered to 3.60% from 3.85%, and the one-year loan prime rate (LPR) was lowered to 3.10% from 3.35%.  

A group of large Chinese banks established the LPR, which was lowered after the People’s Bank of China announced measures to encourage individuals and businesses to take out loans in late September. Lowering interest rates and releasing liquidity are two of the steps taken to promote bank lending.

In China, the one-year LPR is the basis for the majority of newly issued and outstanding loans, although the five-year rate affects the cost of mortgages and other long-term loans.

In an effort to counteract the impact of reduced loan rates on their shrinking profit margins, China’s biggest state-owned lenders lowered their deposit rates last week.

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