The People’s Bank of China lowered its one-year Loan Prime Rate to 3.0% on May 20, a record low that underscores just how seriously Beijing is treating its economic slowdown. The previous rate sat at 3.1%, and this marks the first cut since October 2024.
The five-year LPR, which anchors mortgage pricing across the country, also dropped by 10 basis points to 3.5%, down from 3.6%.
What the PBOC actually did, and why it matters
The cut came after seven months of holding rates steady. That pause, stretching back to October 2024, coincided with persistently weak economic signals. Industrial output has been sluggish. Retail sales have underwhelmed.
China’s monetary policy stance has been described as “moderately loose.” The one-year LPR has never been this low, and the research indicates it has remained at 3.0% through May 2026, marking 12 consecutive months at this level.