China News Agency, Beijing, August 20th (Reporter Pang Wuji) China's loan market quoted interest rate (LPR) has remained unchanged for five consecutive months.
On the 20th, the People's Bank of China authorized the National Interbank Funding Center to publish data showing that the 1-year LPR is 3.85%, and the 5-year or more LPR is 4.65%. Since May, LPR has not been adjusted for 4 consecutive months.
The Shell Research Institute analyzed that the LPR has not been adjusted for 4 consecutive months, which means that the pace of monetary policy easing has been suspended. Since LPR was formed by adding points to the interest rate of the Mid-term Lending Facility (MLF), the central bank's one-year MLF was over-renewed on August 17, and the interest rate remained flat. Therefore, the LPR in August remained unchanged within expectations. The LPR has not been adjusted for more than a few months. This reflects that China’s economic recovery has exceeded expectations after the epidemic, and the monetary policy has been adjusted accordingly to maintain the principle of timely and appropriateness.
Since August 2019, China has implemented the LPR quotation mechanism for one year. During the period, the LPR referenced by the mortgage interest rate for more than 5 years experienced three downward adjustments for a total of 20 basis points.
In the actual implementation, mortgage interest rates in many places have shown a downward trend. According to statistics from the Shell Research Institute, the average mainstream mortgage interest rate in 36 cities has dropped for eight consecutive times. In August, the average mainstream first home interest rate in 36 cities was 5.21%, and the second set was 5.53%, down 3 basis points from July, and down 36 basis points and 39 basis points respectively from the end of last year.
It is worth noting that August 31 is the "deadline" for the conversion of stock floating-rate loan pricing benchmarks. Many banks have already started batch conversion of stock mortgage interest rate pricing benchmarks.
On August 12, the five state-owned banks, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, and Postal Savings Bank of China, all issued announcements stating that, starting from August 25, stock floating interest rate individuals who meet the conversion conditions will be released. Housing loans are converted to LPR pricing in batches.
Xu Xiaole, chief market analyst at Shell Research Institute, believes that from the current economic situation, domestic liquidity will remain reasonably abundant in the second half of the year. Therefore, there may still be some room for decline in LPR in the short term, but it is difficult to determine the mid-to-long-term LPR trend, so the stock floats Interest rate loans with fixed interest rates and with reference to the choice of LPR pricing, people with loans should make their choice based on their own risk preference and current housing loan situation. (Finish)