China’s central bank maintains interest rates, but cuts mortgage rate for first home

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The People’s Bank of China (PBoC, the Chinese central bank) decided to leave some of its key interest rates unchanged on Monday, despite further signs of a slowdown in the world’s second-largest economy amid government efforts. Chinese to contain the current wave of Covid-19 in the country.

In a brief statement, the PBoC said it had injected 100 billion yuan (about US$14.7 billion) of liquidity into the financial system through its medium-term credit facility at an interest rate of 2.85%, the same as the previous operation.

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The PBoC also injected 10 billion yuan through seven-day reverse repo agreements, charging 2.1% interest, also the same as the last transaction.

This means that the Chinese central bank is likely to leave the benchmark interest rates for loans, the so-called LPRs, which are based on medium-term credit rates, unchanged this month.

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On the other hand, the PBoC lowered the mortgage rate floor for first-time buyers by as much as 20 basis points, in a new attempt to revive the Chinese real estate sector.

Source: CNN Brasil

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