China News Agency, Beijing, February 20th (Reporter Pang Wuji) On the 20th, the People's Bank of China authorized the National Interbank Funding Center to announce the latest loan market quotation rate (LPR): 1-year LPR is 3.65%, and the 5-year period is over The LPR was 4.3%, both unchanged from the previous month.

The LPR has remained unchanged for six consecutive months.

　　Wen Bin, Chief Economist of China Minsheng Bank, said that the LPR has continued to "stand still" since the asymmetrical reduction in August last year, mainly because policy interest rates such as the MLF (Medium-term Lending Facility) have remained unchanged, and the rapid rise in market interest rates has increased the cost of bank liabilities. Due to factors such as further pressure on the net interest margin under the superimposed effect of capital and liabilities, there is no basis and room for a corresponding reduction in LPR quotations.

　　Although the LPR, which is a reference to the mortgage interest rate of more than 5 years, has not been adjusted for 6 consecutive months, under the dynamic adjustment mechanism of the first-home loan interest rate policy, the first-home loan interest rates in many places in China have been significantly adjusted.

　　The statistics released by the Shell Research Institute on the same day show that in February 2023, the mainstream interest rate of first-home loans in 103 key cities in China averaged 4.04%, a decrease of 6 basis points from the previous month. Significantly downward, the absolute level hit a new low since 2019.

During the same period, the average interest rate of second-home loans was 4.91%, which was flat from the previous month.

　　According to the monitoring of the Shell Research Institute, in February, among the 38 cities that met the dynamic adjustment policy of the first-home loan interest rate, the first-home loan interest rate in 17 cities including Shijiazhuang, Harbin, Changchun, and Fuzhou was adjusted back to less than 4%.

At present, 23 of the 103 key cities have lowered the first-home loan interest rate.

　　Pang Ming, Chief Economist and Director of Research Department of Jones Lang LaSalle Greater China, told a reporter from China News Agency that there is currently a large spread between stock mortgages and incremental mortgages.

As China has launched the first dynamic adjustment mechanism for housing loan interest rate policy since the beginning of this year, the urgency for banks to further lower the LPR with a period of more than 5 years in the short term has declined.

In December 2022, the national average interest rate of newly issued personal housing loans is 4.26%, which is also at a historically low level.

　　Pang Ming believes that it is still necessary to use the market-based adjustment mechanism of deposit interest rates to release the effectiveness of LPR reform, and further promote the stability and decline of residential mortgage interest rates and personal consumption credit costs.

Due to the recent sharp reduction in deposit interest rates, commercial banks have the ability and willingness to further reduce the room for adding points to LPR quotations with a period of more than 5 years.

In addition, it is not ruled out that the asymmetrical reduction of LPR with a period of more than 5 years in the future will further reduce the possibility of further decline in mortgage interest rates.

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