SHANGHAI: China’s central bank cut its benchmark lending rate again on Monday as policymakers move to shore up an economy battered by a property crisis and repeated Covid-19 lockdowns.
After a monthly meeting, The People’s Bank of China lowered the one-year loan prime rate by 5 basis points to 3.65% from 3.7%, while the five-year rate was cut by 15 basis points to 4.3% from 4.45%.
China’s economy in the second quarter expanded by 0.4% as virus lockdowns weighed on industrial and consumer spending. Monday’s cuts follow last week’s trimming of medium-term lending facility loans to improve banks’ liquidity.
Most new and outstanding loans in China are based on the one-year loan prime rate, which is now loosely pegged to the central bank’s medium-term lending facility rate, while the five-year rate influences the pricing of mortgages.