BEIJING -- China lowered its one-year loan prime rate (LPR), a market-based benchmark lending rate, for the first time in 20 months on Monday.

China's one-year LPR came in at 3.8 percent, down from 3.85 percent a month earlier, according to the National Interbank Funding Center (NIFC).

The over-five-year LPR, on which many lenders base their mortgage rates, remained unchanged from the previous reading of 4.65 percent.

China will continue implementing proactive fiscal policies and prudent monetary policies for steady economic progress next year, according to the annual Central Economic Work Conference recently held in Beijing.

Prudent monetary policies should be flexible and appropriate, and liquidity should be maintained at a reasonable and ample level, the meeting said.

Based on bank quotes calculated by adding a few basis points to the interest rate of open market operations, mainly referring to the medium-term lending facility rate, the LPR is calculated by the NIFC to serve as a pricing reference for bank lending. The LPR currently consists of rates with two maturities -- one year and over five years.

The quoting banks submit their figures before 9 am on the 20th day of every month. The NIFC calculates and releases the LPR at 9:30 am on the same day or on the next day.