Core Points - The People's Bank of China announced a decrease in the Loan Prime Rate (LPR) for both 1-year and 5-year terms, with the 1-year LPR at 3.0% and the 5-year LPR at 3.5%, both down by 10 basis points from the previous period [1] - Multiple banks have also lowered their RMB deposit rates, which is expected to stabilize the net interest margin of commercial banks and effectively reduce the overall financing costs for the real economy [1][3] Group 1: LPR and Deposit Rate Adjustments - The recent LPR decrease aligns with market expectations, as the new monetary policy framework positions the 7-day reverse repurchase rate as the primary policy rate, facilitating the transmission of interest rates from short to long [2] - The reduction in LPR is anticipated to lead to a more significant decrease in loan rates for enterprises and residents, thereby lowering financing costs and promoting investment and consumption [2] - The simultaneous reduction in deposit rates by major banks, including the six largest state-owned banks, is a proactive measure to maintain stable interest margins amid historically low financing costs [3] Group 2: Economic Implications and Future Outlook - The average interest rate for newly issued corporate loans in April was approximately 3.2%, down about 4 basis points from the previous month and 50 basis points year-on-year, while the average rate for personal housing loans was around 3.1%, down 55 basis points year-on-year [3] - Experts suggest that if economic growth pressures increase in the second half of the year, there may be further room for LPR reductions, although expectations should be tempered regarding the pace and magnitude of future rate changes [4] - The current focus is on stabilizing interest margins and ensuring the sustainable operation of banks, with potential for further LPR declines if effective demand does not improve significantly [4]