Since this year, the LPR has only been adjusted once. Up to now, LPR has been “in place” for 7 consecutive months. “With a focus on stabilizing economic performance in the first quarter of 2026, monetary policy is expected to end the observation period and enter a vigorous phase.” Wang Qing, chief macro analyst at Dongfang Jincheng, predicts that the People's Bank of China may implement a new round of interest rate cuts and cuts in the first quarter of 2026, and the possibility that it will land before the Spring Festival is not ruled out. This will drive a follow-up reduction in LPR for the two term varieties. Dong Ximiao, chief researcher at CMB and deputy director of the Shanghai Finance and Development Laboratory, believes that if deposit interest rates and policy interest rates fall further in 2026, LPR is expected to decline steadily, and more attention will be paid to playing a role as a structural monetary policy tool. Overall, there is still room for interest rate cuts to be implemented in 2026, but the probability of interest rate cuts is greater than interest rate cuts.

Since this year, the LPR has only been adjusted once. Up to now, LPR has been “in place” for 7 consecutive months. “With a focus on stabilizing economic performance in the first quarter of 2026, monetary policy is expected to end the observation period and enter a vigorous phase.” Wang Qing, chief macro analyst at Dongfang Jincheng, predicts that the People's Bank of China may implement a new round of interest rate cuts and cuts in the first quarter of 2026, and the possibility that it will land before the Spring Festival is not ruled out. This will drive a follow-up reduction in LPR for the two term varieties. Dong Ximiao, chief researcher at CMB and deputy director of the Shanghai Finance and Development Laboratory, believes that if deposit interest rates and policy interest rates fall further in 2026, LPR is expected to decline steadily, and more attention will be paid to playing a role as a structural monetary policy tool. Overall, there is still room for interest rate cuts to be implemented in 2026, but the probability of interest rate cuts is greater than interest rate cuts.