China banks cut key rate by record to boost ailing economy

The move is the latest action to boost the ailing housing market and comes after the PBoC cut the floor on the rate for new mortgages Sunday to 20 basis points below the five-year LPR.Combined with yesterday’s reduction that means the lowest possible rate banks can offer to homebuyers will be 4.25%.

CHINESE banks cut a key interest rate for long-term loans by a record amount, a move that would reduce mortgage costs and may help counter weak loan demand caused by a property slump and Covid lockdowns.

The five-year loan prime rate (LPR), a reference for home mortgages, was lowered to 4.45% from 4.6%, according to a statement by the People’s Bank of China (PBoC) yesterday.