China's loan prime rates remain unchanged

BEIJING, March 20 (Xinhua) -- China's one-year loan prime rate (LPR), a market-based benchmark lending rate, was 3.45 percent on Wednesday, unchanged from the previous month.

The over-five-year LPR, on which many lenders base their mortgage rates, also held steady from the previous reading of 3.95 percent, according to the National Interbank Funding Center.

Last month, China cut the over-five-year rate by 25 basis points to 3.95 percent, the largest drop in recent years. The one-year rate remained unchanged in February.

A lower LPR is expected to shore up the credit and property markets, reduce the financial cost of businesses and individuals, and contribute to a steady economic recovery.

According to data released by the National Bureau of Statistics (NBS) earlier this week, the Chinese economy maintained good recovery momentum in the first two months of the year, with accelerated growth in retail sales, fixed-asset investment, and value-added industrial output.

According to the NBS, the sound performance in January-February has laid a good foundation for full-year growth.

China has a rich monetary toolbox, and there is still ample policy headroom, said Pan Gongsheng, governor of the People's Bank of China, earlier this month.

Pan said the average reserve requirement ratio (RRR) of China's entire banking sector is 7 percent, and there is still room for further RRR cuts.

Wen Bin, chief economist at China Minsheng Bank, said Wednesday that the LPR will remain stable in the short term, but it may drop if the central bank further cuts RRR.