On [date], the People's Bank of China authorized the National Interbank Funding Center to announce that the latest Loan Prime Rate (LPR) is: 1-year at 3.45% (previous value 3.55%), and over 5-year at 4.20% (previous value 4.30%), both down by 0.10 percentage points compared to the previous rates. This marks the third adjustment this year and the largest reduction so far.

Some analysts believe that the current open market 7-day reverse repo operation interest rate has become the primary policy interest rate of the People's Bank of China. The People's Bank of China announced on a certain date that it would reduce the 7-day reverse repo operation interest rate to .%, a decrease of 10 basis points from the previous rate, guiding this adjustment.

Wen Bin, Chief Economist at China Minsheng Bank, stated that on a certain date, the State Council Information Office held a press conference on financial support for high-quality economic development. The People's Bank of China announced policies such as reserve requirement ratio cuts and interest rate reductions to strengthen counter-cyclical adjustments. On a certain date, the People's Bank of China issued a public notice, stating that to enhance the counter-cyclical regulation of monetary policy and support stable economic growth, the interest rate for 7-day reverse repurchase operations was reduced from 2.75% to 2.00%.

Under the new monetary policy framework, the reverse repo rate will serve as the primary policy rate, gradually unblocking the transmission of interest rates from short to long. In this direction, with the policy rate cut taking effect on the designated date, the quoted rate will also be adjusted downward in the following month, according to Wen Bin.

Before the official announcement of the rate cut, Pan Gongsheng, Governor of the People's Bank of China, had already hinted at this during the opening ceremony of the Financial Street Forum Annual Conference. At that time, he stated that commercial banks had announced a reduction in deposit interest rates on the morning of the day, and it was expected that the rates to be announced on the day would also decrease by about 0.25 percentage points.

As the primary reference benchmark for loan interest rate pricing, this significant reduction in the quoted rate is expected to further lower the financing costs for the real economy, promoting consumption and expanding investment. Wen Bin stated that since the end of the month, a series of stable growth policies have been continuously intensified, with their targeting, combination, and effectiveness significantly enhanced. With the continued manifestation of policy effects, the probability of achieving the annual economic development goals has greatly increased.

Looking ahead, Wen Bin believes that the downward adjustment of the quotation is likely to be limited in the short term.