By Lyu Cheng and Ke Ziwei | wuhudaily.cn

Shanghai Pudong Development Bank Wuhu Branch has granted a 30-million-yuan working capital loan priced against the Deposit-taking Institutions Repo Rate (DR) to a private trading enterprise — the city's first such loan and one of the first batch in Anhui Province.

Shortly afterward, China Merchants Bank Wuhu Branch issued a 1-million-yuan DR-priced loan to a green enterprise. The two transactions reflect local banks' active efforts to diversify their loan pricing systems.

Derived from interbank pledged repo transactions, DR is a market-driven interest rate that reflects liquidity conditions and funding availability in the banking system. The loans target technology and green sectors, matching borrowers whose funding needs align with DR pricing characteristics. The Pudong Development Bank borrower is a raw material procurement platform for a group with annual purchases exceeding 1 billion yuan and substantial working capital needs; the China Merchants Bank borrower focuses on water environment treatment and ecological restoration, needing funds for environmental project procurement. Both loans are one-year facilities, using the three-month average of DR001 prior to the pricing date as the benchmark rate, directly linking loan pricing to money market rates and easing the enterprises' funding pressure.

DR provides banks and enterprises with another market-based pricing anchor beyond the Loan Prime Rate (LPR), helping shift loan pricing from reference quotes to transaction-based rates. For banks, this model supports more refined asset and liability management and better aligns pricing dynamics between money markets and credit markets.