The Loan Prime Rate (LPR), the reference point against which banks now price loans, held steady in December. The one-year LPR was unchanged at 4.15% (both the Bloomberg consensus and our forecast were 4.10%), while five-year LPR remained at 4.80%. The LPR replaced the PBOC’s traditional benchmark lending rate in August and has since declined on three occasions, by a cumulative 16 basis points. It is published monthly and set based on quotations provided by banks.
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