Recently, the central bank announced that loan interest rates will shift from a single reference LPR pricing to a more diversified pricing benchmark. Now, the central bank governor says that a new anchor will be added to loan interest rates in the future: the DR interest rate. The DR interest rate is the interest rate of loan transactions between depository institutions such as banks. In other words, the DR interest rate is actually a transaction at a time, and it changes every day. When there is a lot of money in the market, the DR interest rate falls; when market capital is tight, the DR interest rate immediately rises. It is a “transactional” interest rate, which can more realistically reflect the liquidity situation and the degree of capital tightness within the banking system. The DR interest rate is sensitive and changes rapidly. It is suitable for large and medium-sized enterprise loans, and requires banks and enterprises to discuss contracts one-on-one. For example, factories often require working capital, and loans can be discussed to anchor DR interest rates. For enterprises, using DR can feel changes in market capital costs in a more timely and accurate manner, and make investment and financing decisions in a more market-based manner. For banks, using DR makes it easier to set reasonable prices according to capital costs. However, LPR is relatively stable. Continued use of LPR for mortgages, personal loans, and small and micro enterprise loans may be more appropriate. The “double anchor reform” is to allow interest rates to be transmitted more smoothly. The central bank's policy signals can be transmitted to the real economy more quickly, the degree of marketization is higher, and it can also better meet the needs of different groups of people.

Recently, the central bank announced that loan interest rates will shift from a single reference LPR pricing to a more diversified pricing benchmark. Now, the central bank governor says that a new anchor will be added to loan interest rates in the future: the DR interest rate. The DR interest rate is the interest rate of loan transactions between depository institutions such as banks. In other words, the DR interest rate is actually a transaction at a time, and it changes every day. When there is a lot of money in the market, the DR interest rate falls; when market capital is tight, the DR interest rate immediately rises. It is a “transactional” interest rate, which can more realistically reflect the liquidity situation and the degree of capital tightness within the banking system. The DR interest rate is sensitive and changes rapidly. It is suitable for large and medium-sized enterprise loans, and requires banks and enterprises to discuss contracts one-on-one. For example, factories often require working capital, and loans can be discussed to anchor DR interest rates. For enterprises, using DR can feel changes in market capital costs in a more timely and accurate manner, and make investment and financing decisions in a more market-based manner. For banks, using DR makes it easier to set reasonable prices according to capital costs. However, LPR is relatively stable. Continued use of LPR for mortgages, personal loans, and small and micro enterprise loans may be more appropriate. The “double anchor reform” is to allow interest rates to be transmitted more smoothly. The central bank's policy signals can be transmitted to the real economy more quickly, the degree of marketization is higher, and it can also better meet the needs of different groups of people.