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China increases support for economic growth by lowering lending rates

China recently lowered market-based benchmark lending rates to support its economy. According to the National Interbank Financing Center, the five-year or longer loan prime rate (LPR), which many lenders base their mortgage rates on, fell 15 basis points to 4.45 percent. This is the largest reduction in such rates since the country renewed its LPR mechanism in 2019.

According to the official news agency, the one-year LPR was 3.7%, unchanged from a month ago.

China recently lowered market-based benchmark lending rates to support its economy. According to the National Interbank Financing Center, the five-year or longer loan prime rate (LPR), which many lenders base their mortgage rates on, fell 15 basis points to 4.45 percent. This is the largest reduction in such rates since the country renewed its LPR mechanism in 2019.

Monthly public data is the bank’s price base rate and is based on the central bank’s open market operation rates, especially the medium-term lending facility rate.

The latest rate cuts follow recent moves that allow commercial banks to lower their mortgage interest rate limits by 20 basis points for first-home buyers, based on LPR.

The recent resurgence of COVID-19 and volatile world conditions have affected the economy, damaging China’s real estate sector, an essential sector for economic growth.

The country’s economy was hit by the domestic resurgence of COVID-19 cases in April. Authorities emphasize that the negative effects are short-lived.

China has taken steps to revive its economy and help businesses survive difficult times. These steps include increasing re-loan quotas, innovation, elderly care services, launching re-lending contracts for clean use of coal, and more comprehensive loans for small and medium-sized businesses through market-based means. Includes encouraging local banks to issue.

In April, the central bank announced a reduction in the reserve requirement ratio of financial institutions, adding a long-term and stable source of funds to financial institutions in the country.

Measures such as tax refunds, reduced fees, postponement of social security contributions, and industry and supply chain facilitation are also being taken to assist market actors.

Central authorities called for accelerated pace and stepped-up efforts to implement macro-policies and urged local governments to propose further steps in May to get the economy back on track.

Fiber2Fashion News Desk (DS)



China increases support for economic growth by lowering lending rates

Source link China increases support for economic growth by lowering lending rates

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