(Correction),
People’s Bank of China / Reuters = News 1, ‘China has effectively cut its Loan Prime Rate (LPR) by 0.1% for the first time in 5 months. This move came just a week after the release of lower-than-expected second-quarter economic growth figures, interpreted as the Chinese government’s efforts to boost the economy through liquidity supply.’,
,
, ‘On the 22nd, the People’s Bank of China announced a 0.1% points reduction in the 1-year LPR to 3.35% and the 5-year LPR to 3.85%. The 1-year LPR serves as the benchmark for general corporate loans, while the 5-year LPR is used as the reference rate for long-term loans like mortgages.’,
,
, ‘LPR serves as the average rate of loans offered by commercial banks to prime customers, effectively acting as the benchmark rate. The People’s Bank of China calculates and announces the average lending rates of 20 commercial banks at 9 a.m. local time on the 20th of each month (or the following business day if the 20th falls on a weekend).’,
,
, ‘Market expectations leaned towards a rate freeze this month, but the People’s Bank of China decided to cut rates after 5 months. In February, the central bank had already lowered the 5-year LPR from 4.2% to 3.95% by a relatively substantial 0.25% points to support the real estate market.’,
,
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China Retail Sales Trends / Graphic = Lee Ji-hye, ‘This rate cut follows China’s second-quarter economic growth rate announcement on the 15th, showing a 4.7% growth, a 0.6 percentage point decline from the previous quarter (5.3%), falling short of expectations. Particularly in June, China’s retail sales only increased by 2% compared to the same period last year, marking the lowest figure since December 2022.’,
,
, ‘The People’s Bank of China also announced a reduction in the 7-day reverse repo (reverse repurchase agreement) rate from 1.8% to 1.7% on that day. This is nearly a year since the last cut in the reverse repo rate and is aimed at optimizing open market operations and increasing financial support to the real economy.’,
,
, ‘Bloomberg reported that the People’s Bank of China’s actions were aimed at strengthening stimulus measures in response to weak economic growth.’