China cut lending rates on Monday, reinforcing easing measures announced last week, as Beijing steps up efforts to boost credit demand in an economy battered by the property crisis and a resurgence of coronavirus cases.
The one-year lending rate (LPR) fell 5 basis points to 3.65% at the central bank’s monthly rate, while the five-year LPR fell by a bigger margin, down 15 basis points to 4.30%.
Economists had expected a 10 basis point decline in the one-year LPR.
Most new and outstanding 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.
Source: Capital
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