SHANGHAI, Feb. 20 (Xinhua) -- Just after the Spring Festival holiday, China ushered in the first "interest rate cut" in 2024. On February 20, the People's Bank of China authorized the National Interbank Lending Center to announce that the one-year LPR was 345%, unchanged; LPR for more than 5 years is 395%, down 25 basis points from the previous value.
What are the signals from the sharp decline in the 5-year loan market** interest rate (LPR)? And how does it affect your "wallet"?
People's Bank of China building. Photo by Xinhua News Agency reporter Cai Yang.
The goal of stabilizing growth and promoting development is clear.
Xiao Lisheng, director of the Global Macroeconomic Research Office of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, said that the five-year LPR reduction is the largest since the reform of China's LPR formation mechanism in August 2019. ”
Wen Bin, chief economist of China Minsheng Bank, said that the long-term LPR fell more this time, and the spread between the 1-year and 5-year LPR narrowed to 05 percentage points is conducive to improving the coordination of interest rate policies and improving the efficiency of financial resource allocation.
Zeng Gang, director of the Shanghai Finance and Development Laboratory, commented that the LPR reduction is more "targeted". The 1-year LPR remains unchanged, helping to ease the downward pressure on banks' interest rate spreads, while creating more room for the decline of LPR over 5 years.
The centralized resettlement area of Shijiazhuang High-tech Industrial Development Zone (drone**) taken on January 16 by Xinhua News Agency reporter Yang Shiyao.
Reduce the interest burden on home buyers.
LPR with a maturity of more than 5 years is the pricing "anchor" for the vast majority of personal home loan interest rates. According to the calculation of a commercial loan of 1 million yuan, a term of 30 years, and equal principal and interest, the LPR reduction of more than 5 years will save more than 5 interest for home buyers without considering the additional points20,000 yuan; The equal principal method saves nearly 380,000 yuan.
Dong Ximiao, chief researcher of Zhaolian, pointed out that after the LPR of more than 5 years falls, the interest expense of residents' housing loans will decrease. For existing mortgages, the mortgage interest rate will be adjusted after the repricing date; For new mortgages, it is expected that most banks will keep the increase on the basis of this LPR, thereby reducing the effective interest rate of new mortgages. The reporter learned that a number of banks in Shanghai updated the mortgage interest rate on the same day, of which the first home loan interest rate was adjusted to 385%, and the interest rate for second home loans is 415% to 425%。
On February 10, the flower street of the ancient city of Wuhu, Anhui Province was full of tourists. Xinhua News Agency.
It will help boost residents' willingness to consume.
The LPR reduction also reflects the continuity of the policy. Since the LPR reform in August 2019, the LPR with a maturity of more than 5 years has been reduced 8 times, with a total reduction of 90 basis points; The 1-year LPR fell nine times, by 80 basis points. Experts believe that with the adjustment of the interest rate of the existing housing loan and the reduction of residents' interest expenses, it will also be conducive to the further recovery of residents' consumption.
On February 20, in a fastener production enterprise in Yongnian District, Handan City, workers loaded and unloaded goods in an intelligent storage workshop. Photo by Xinhua News Agency reporter Wang Xiao.
Reduce the financing cost of enterprises and improve the credit environment.
The sharp decline in LPR with a maturity of more than 5 years will also reduce the interest rate of medium and long-term loans for enterprises (institutions) and further stimulate the demand for medium and long-term loans of enterprises (institutions). Taking manufacturing enterprises as an example, "after the interest rate cut, it can not only enhance the ability and willingness of enterprises to innovate in science and technology, but also help accelerate the development of new quality productivity." Xiao Lisheng said.
In addition, lowering interest rates is also conducive to major national projects and infrastructure construction with a high proportion of long-term loans, and also helps to reduce the pressure on local debt interest expenses.
Reporter: Sang Tong, Du Kang.
Final review: Feng Xuan.
Editors: Li Qian, Tao Hong.
*: Xinhua News Agency).