As part of its efforts to boost economic growth, China has lowered its benchmark lending rate, a decision consistent with previous announcements of monetary easing measures.
The one-year lending prime rate (LPR) was lowered by 25 basis points from 3.35% to 3.10%. At the same time, the five-year LPR, which influences mortgage prices, fell by 25 basis points to 3.60% from 3.85%.
Today’s adjustment to lending rates is the first such change since July. These rates are very important because most new and existing loans in China are tied to a 1-year LPR, whereas 5-year rates serve as a benchmark for home loans.
People’s Bank of China Governor Ban Gongsheng predicted a decision to cut interest rates at a financial forum last week, saying a 20-25 basis point rate cut would be expected on Monday.
The rate cut follows broader stimulus measures introduced by the People’s Bank, including a 50 basis point cut in bank reserve requirements and a 20 basis point cut in the reverse repo rate until the 7th record date of September 24, 2023. It is something. Furthermore, the interest rate on the medium-term loan scheme was lowered by 30 basis points last month.
These measures are part of efforts to support China’s economy, which is facing challenges such as a slowdown in the real estate sector and the need to boost consumer spending. The government is actively taking steps to provide relief and promote economic stability through these monetary policy adjustments.
Reuters contributed to this article.
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