China's LPR remains stable in December

China's one-year loan prime rate (LPR), a market-based lending rate, came in at 3.1 percent on Friday, remaining unchanged from November. The over-five-year LPR, on which many lenders base their mortgage rates, also remained unchanged at 3.6 percent from the previous reading, according to the National Interbank Funding Center.

The monthly-released data serves as a pricing reference for banks and is based on rates of the People's Bank of China's (PBOC) open market operations.

Earlier this month, Chinese leaders pledged at top economic agenda-setting meetings to ramp up monetary easing measures, including implementing interest rate reductions, to support the Chinese economy.

The PBOC kept the one-year and five-year LPRs unchanged in December, following a 25 basis point cut in October. The central bank had earlier surprised markets by shaving the major short and long-term lending rates in July.

Commenting on recent LPR changes and adjustments, Wang Qing, chief macro analyst at Golden Credit Rating, said, "after the introduction of incremental policies, economic sentiment has improved since October, and the real estate market has also shown significant recovery."

Transmitting the substantial effects of previous forceful policy rate cuts through a significant reduction in LPR to the real economy is aimed at guiding the financing costs of enterprises and residents downwards, which is also the fundamental reason for the continuous stability of the LPR in the past two months, Wang said.

(With input from Xinhua; cover via CFP)