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  • Writer's pictureBy The Financial District

China Cuts Lending Rates To Spur Consumption

China's central bank cut key lending rates Tuesday, including a mortgage-linked benchmark, in a move to spur investment and consumption after the country's post-pandemic recovery softened over the last five months, CK Tan reported for Nikkei Asia.


Photo Insert: The People's Bank of China (PBOC) lowered the one-year loan prime rate by 10 basis points to 3.55% from 3.65%, while trimming the five-year rate by 10 basis points to 4.2% from 4.3%.



Following a monthly meeting, the People's Bank of China (PBOC) lowered the one-year loan prime rate by 10 basis points to 3.55% from 3.65%, while trimming the five-year rate by 10 basis points to 4.2% from 4.3%.


Those moves will reduce borrowing costs for companies and households.


The interest rate cut was small — a tenth of a percentage point for the country’s benchmark one-year and five-year interest rates for loans.


But because almost all of the country’s corporate lending and mortgages are linked to the two rates, the reductions could have some effect on the overall pace of economic growth, Keith Bradsher reported for the New York Times.


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

PBoC’s move puts China at odds with policies in the West. The Federal Reserve spent over a year battling inflation by raising rates before pausing earlier this month. The European Central Bank has also been pushing up interest rates in response to inflation.





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