China has reduced its key lending rates in a bid to bolster market confidence and stimulate economic growth. On Tuesday, the one-year Loan Prime Rate (LPR), a crucial benchmark for market-based lending, was cut by 10 basis points to 3.0%. Similarly, the over-five-year LPR, commonly used to determine mortgage rates, was lowered by the same margin to 3.5%, according to the National Interbank Funding Center.
This move marks the first rate reduction since October and follows the May 7 announcement by Pan Gongsheng, governor of the People’s Bank of China, who indicated a 0.1 percentage point cut in interest rates. The adjustments are expected to lower borrowing costs for businesses and individuals, providing a boost to market confidence.
Recent data from the National Bureau of Statistics (NBS) showed that in April, the sales prices of commercial housing in 70 large and medium-sized cities remained flat or experienced slight month-on-month decreases. However, the year-on-year decline in prices continued to narrow.
Fu Linghui, spokesperson for the NBS, noted that transactions in some first- and second-tier cities have picked up, and overall house prices are generally stable. The rate cuts are anticipated to further support the real estate market and economic recovery.
