China prime loan rate drops 20 basis points after central bank cuts rate

24 Nov, 2014

SHANGHAI: China's loan prime rate (LPR), an official figure calculated from contributions from nine major commercial banks, slid 20 basis points on Monday after a surprise cut to benchmark loan rates by the central bank late on Friday.

The one-year rate, reported on a website operated by the State Administration of Foreign Exchange, stood at 5.56 percent at midday on Monday, down from 5.76 percent, where it has been since June.

The LPR is a rough proxy for real lending costs in China. The central bank has reduced official guidance rates for loans in part to spur more productive investment and also alleviate the cost of rolling over outstanding loans for Chinese companies.

Copyright Reuters, 2014

Read Comments