The People's Bank of China slashed key lending rates to new lows at the October fixing, intensifying efforts to support a weakening economy.
Chinese central bank cuts lending rates
The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was cut by 25bps to 3.1%, and the five-year rate, a reference for property mortgages, was reduced by the same margin to 3.6%. The lending rates were last cut in July. Monday's decision followed Governor Pan Gongsheng's indication last week that the LPR would be lowered by 20 to 25bps. He also suggested that the reserve requirement ratio (RRR) for commercial banks could be reduced further in Q4.
Recent PBoC's moves
Recently, the PBoC and the Ministry of Housing introduced a range of policies to ease the financial burden on property owners and regain public confidence. In September, China's central bank began its most aggressive stimulus measures since the pandemic, including measures to support the ailing property sector and boost consumption.
