China Holds Benchmark Rate for 10th Straight Month, Attention on Scope for Stimulus Cuts

China's central bank, the People's Bank of China (PBOC), announced on March 20, 2026, that it would hold steady the benchmark lending rates for businesses and households: the 1-year Loan Prime Rate (LPR) at 3.0% and the 5-year LPR at 3.5%.

The 1-year LPR serves as the benchmark for general loan rates, and the 5-year LPR is the basis for mortgage rates. The PBOC compiles and reviews funding costs and risk premiums submitted by 20 major commercial banks each month, announcing the LPR around the 20th of each month. This marks the 10th consecutive month of a hold, and the market is keenly watching interest rate policy decisions made in consideration of the current economic situation. China last lowered the 5-year LPR from 3.85% to 3.6% and the 1-year LPR from 3.35% to 3.1% in October 2023, a reduction of 0.25 percentage points (p) each.

This decision was in line with market expectations, as all 20 market participants surveyed predicted an LPR hold.

While China's benchmark rates remain on hold, its stance of continuing to supply liquidity and reduce costs to stimulate the economy is expected to persist.