China on November 20 cut interest rates as cooling domestic demand and a continuing trade conflict with the United States hit growth. The one-year loan prime rate (LPR)—one of the preferential rates commercial banks impose on their best customers—was lowered to 4.15 per cent from 4.20 per cent in October, the People’s Bank of China (PBoC) said in a statement.
The LPR, released on the 20th day of every month, is based on rates of the central bank’s open market operations, especially medium-term lending facility rates. The reduction in LPR, which serves as a reference for other lending rates, was reportedly widely expected after disappointing economic data in last month.China on November 20 cut interest rates as cooling domestic demand and a continuing trade conflict with the United States hit growth. The one-year loan prime rate (LPR)-one of the preferential rates commercial banks impose on their best customers-was lowered to 4.15 per cent from 4.20 per cent in October, the People's Bank of China said in a statement.#
The five-year LPR, on which many lenders base their mortgage rates, was also lowered to 4.8 per cent from 4.85 per cent, according to global newswires.
The PBoC announced in August a plan to better reflect market changes with a new benchmark lending rate. The LPR cut is the latest in a series of measures used to reduce borrowing costs as China attempts to free up funds for credit-starved parts of the economy.
PBoC on November 18 trimmed the seven-day reverse repurchase rate to 2.50 per cent from 2.55 per cent, encouraging commercial banks to lend more to small and medium-sized companies.
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