|
Mumbai, October 21 (Commodities Control): China has reduced its benchmark lending rates, continuing its efforts to stimulate economic growth. The People's Bank of China (PBOC) lowered the one-year loan prime rate (LPR) by 25 basis points to 3.10%, while the five-year LPR, which influences mortgage rates, was cut to 3.6% from 3.85%. This marks the first adjustment to lending rates since July, following earlier policy rate cuts last month.
The rate reductions are part of a broader package of measures initiated on September 24, including a 50 basis point cut to banks' reserve requirement ratio and a 20 basis point reduction in the seven-day reverse repo rate. These moves represent the most aggressive stimulus since the pandemic, targeting support for the property sector and encouraging consumer spending.
Additionally, the PBOC lowered the medium-term lending facility rate by 30 basis points last month. As most loans in China are linked to the one-year LPR, these adjustments are expected to play a key role in spurring economic activity.
Since the announcement of the September measures, the CSI300 Index has climbed over 14%, although recent market sessions have shown signs of volatility, reflecting concerns about whether the policy support is sufficient to drive sustained growth. Meanwhile, the yuan has weakened by 1% against the US dollar during this period.
Recent economic data shows slight improvements, with third-quarter growth surpassing expectations and a rise in retail sales and industrial production in September. However, challenges remain, particularly in the property sector, where investment has fallen over 10% in the first nine months of 2024.
Government officials remain optimistic that China can achieve its annual growth target of around 5%, and further cuts to banks' reserve requirement ratio may be considered before the end of the year.
(By CommoditiesControl Bureau; +91-9820130172)
|
0 Comments 
Post Comment 
