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China lowers lending benchmarks after PBOC's surprise rate cut

Published 07/21/2024, 09:19 PM
Updated 07/21/2024, 09:20 PM
© Reuters. People wearing face masks walk past the headquarters of Chinese central bank People's Bank of China (PBOC), where the Chinese national flag flies at half mast in Beijing as China holds a national mourning for those who died of the coronavirus disease (COV
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SHANGHAI (Reuters) - China cut benchmark lending rates at a monthly fixing on Monday, after the central bank surprised the markets by lowering a key short-term policy rate earlier in the session.

The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.35% from 3.45% previously, while the five-year LPR was reduced by the same margin to 3.85% from 3.95%.

© Reuters. People wearing face masks walk past the headquarters of Chinese central bank People's Bank of China (PBOC), where the Chinese national flag flies at half mast in Beijing as China holds a national mourning for those who died of the coronavirus disease (COVID-19), on the Qingming tomb-sweeping festival, April 4, 2020. REUTERS/Tingshu Wang/ File Photo

In a Reuters survey of 36 market participants conducted last week, 23, or 64% of all respondents, expected both rates to stay unchanged.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

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