Why has the LPR remained unchanged for 11 consecutive months? Expert interpretation

The People's Bank of China authorized the National Interbank Borrowing Center to announce that on April 20, 2026, the Loan Prime Rate (LPR) for the following maturities remained unchanged: 3.0% for the 1-year term and 3.5% for the 5-year term and above. This marks the 11th consecutive month that the LPR has remained unchanged. Experts indicate that the unchanged LPR for both maturities in April meets market expectations. At the end of the fourth quarter of 2025, the net interest margin of commercial banks was at a low level of 1.42%. Considering the loan repricing factor at the beginning of the year, banks' net interest margins will face further pressure to narrow down. In this context, even though the cost of funding in the money market has slightly decreased, there is still insufficient motivation for banks to actively lower their LPR pricing spreads. In addition, experts point out that under multiple internal and external constraints, it is realistic and reasonable for policies to maintain stability. Currently, from a domestic perspective, the macroeconomic fundamentals are better than expected and show resilience even amidst geopolitical disturbances. Looking at the external environment, the escalation of geopolitical conflicts in the Middle East has led to a significant increase in international oil prices, which may bring about imported inflationary pressures. At the same time, the Federal Reserve's reluctance to cut interest rates has slowed down the interest rate environment, restricting the downward movement of the LPR.