The cut to the 5-year LPR is the first since April of 2020. In December 2021 the 1-year was cut from 3.85% to 3.80% - cut a further 10bps today.
The cut to the 5-year is significant for the property sector. The 5-year rate influences the rate on mortgages.
The cuts were flagged, especially since the reduced rate on the latest MLF:
- Nomura expect China to cut its LPR rate again on Thursday (20 January)
- China financial media - analysts expect prime rate cut Thursday