China’s central bank on Monday cut benchmark loan rates as it tried to boost sluggish economic activity, held back by continuing Covid lockdowns and a weak property market.
The one-year Loan Prime Rate, which serves as a benchmark for corporate loans, was lowered to 3.65% from 3.7%, the People’s Bank of China (PBOC) said in a statement.
The five-year LPR, which is used to price mortgages, was cut to 4.3% from 4.45%.
It is the second time in a week the PBOC has cut rates. The seven-day reverse repurchase rate — a key rate at which it provides short-term liquidity to banks – was also reduced.
“The move comes after a data set in July highlighted the Chinese economy was slowing down. This latest tactic isn’t entirely a surprise, but it should act as a further indicator that the global economic stage is losing light,” said Hargreaves Lansdown analyst Sophie Lund-Yates.
Reporting by Frank Prenesti at Sharecast.com
