Group 1 - The Loan Prime Rate (LPR) remains unchanged for July 2025, with the 1-year LPR at 3.0% and the 5-year LPR at 3.5%, consistent with the levels set after a reduction in June 2025 [1] - Market expectations indicated a high probability of the LPR remaining stable due to unchanged policy rates and recovering economic data reducing the urgency for rate cuts [2] - The pricing mechanism for LPR remains stable, as the Medium-term Lending Facility (MLF) rate and reverse repurchase operation rate have not been adjusted, limiting the downward space for LPR [2] Group 2 - The economic policy is currently in an observation phase following the June LPR reduction, with the GDP growth rate for the first half of the year at 5.3%, leading to a decreased necessity for further rate cuts [3] - Commercial banks are experiencing pressure on net interest margins, which are at historical lows of 1.54%, limiting the motivation to compress interest spreads further [4] - The interest rate differential between China and the U.S. is constraining domestic rate cuts, especially with the Federal Reserve maintaining high rates [5] Group 3 - Mortgage rates remain low, with the average first-home loan rate at 3.90% and second-home loan rate at 4.81%, showing a decline compared to the previous year [6] - The reduction in LPR has eased the repayment pressure for borrowers, with a typical monthly payment decrease of 54.32 yuan for a 1 million yuan loan over 30 years [7] - Current corporate loan rates are around 3.2%, indicating manageable financing costs for businesses [8] Group 4 - Short-term adjustments to the LPR are limited, with expectations of stability if economic data continues to improve in Q3 2025; however, a reserve requirement ratio cut is more likely than a rate cut [8] - There remains potential for a medium to long-term reduction in LPR if the Federal Reserve initiates rate cuts or if domestic demand weakens [8] - Regulatory measures may shift towards reducing non-interest costs and enhancing fiscal support to stimulate the economy [8]