China's LPR (Loan Prime Rate) has remained unchanged for 16 consecutive months, with the 1-year LPR at 3.0% and the over-5-year LPR at 3.5%. A publication overseen by the central bank stated that "the necessity of directly lowering policy interest rates is not high."

The People's Bank of China (PBOC) authorized the National Interbank Funding Center to announce the latest Loan Prime Rates (LPRs) on September 20. The one-year LPR is 3.0%, and the over-five-year LPR is 3.5%, both unchanged from the previous month and having remained constant for 16 consecutive months since June 2025. Financial News, a media outlet supervised by the PBOC, cited analysts who noted that with the actual interest rate on new loans having marginally declined in August, "the necessity of directly lowering policy interest rates is not high."

Analysts believe the main reasons for the unchanged LPRs include stable pricing anchors (the PBOC's 7-day reverse repurchase rate remains at 1.40%), pressure on commercial banks' net interest margins (NIMs rebounded to 1.41% in Q2 but are still at a historical low), and the resilience of China's economic fundamentals (GDP grew by 4.7% year-on-year in the first half). Additionally, the Federal Reserve's 25 basis point rate hike in September further exacerbated the inverted China-US interest rate spread, posing an external constraint on a downward adjustment of China's LPRs. However, analysts emphasized that China's monetary policy maintains its "self-centered" stance. If economic downward pressure intensifies later, an RRR cut might precede an interest rate cut, at which point there would still be room for the LPRs to follow suit.