China lowers lending criteria to halt economic slowdown
Join now for FREE unlimited access to Reuters.com
SHANGHAI, Aug 22 (Reuters) – China cut key rates on Monday, adding to easing measures announced last week, as Beijing steps up efforts to boost demand for credit in an economy hampered by a housing crisis and a resurgence of COVID infections.
The one-year loan prime rate (LPR) was cut by 5 basis points to 3.65% at the central bank’s monthly fixing, while the five-year LPR was cut by a larger margin of 15 basis points at 4.30%.
In a Reuters poll conducted last week, 25 out of 30 respondents predicted a 10 basis point reduction in the LPR year on year. All of those surveyed also predicted a five-year term reduction, with 90% predicting a reduction of more than 10 basis points. Read more
Most new and existing loans in China are based on the one-year LPR, which is now loosely linked to the central bank’s Medium-Term Lending Facility (MLF) rate, while the five-year rate influences mortgage pricing.
Join now for FREE unlimited access to Reuters.com
Reporting by Winni Zhou and Brenda Goh Editing by Shri Navaratnam
Our standards: The Thomson Reuters Trust Principles.
Comments are closed.