The People's Bank of China (PBOC) has cut the benchmark lending rate of loan prime rates (LPR). The one-year LPR was cut by 10 basis points from last month's fixing to 3.7 per cent, whereas the five-year LPR was reduced by 5 basis points to 4.6 per cent, a first-time cut after April 2020. The lowered five-year LPR is expected to help reduce mid to long-term financing costs for the manufacturing industry.Liu Guoqiang, deputy governor of the PBOC, explained that banks will refer to the five-year LPR when they offer mid to long-term loans for the manufacturing industry, fixed asset investment loans, or personal mortgages, according to official Chinese media.
There was subdued market reaction to the development. Analysts said it was early to gauge the impact of lowered interest rates on the stock market.
China's central bank has cut the benchmark lending rate of loan prime rates (LPR). The one-year LPR was cut by 10 basis points from last month's fixing to 3.7 per cent, whereas the five-year LPR was reduced by 5 basis points to 4.6 per cent. The lowered five-year LPR is expected to help reduce mid to long-term financing costs for the manufacturing industry.#
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