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China slashes lending rates to new record lows

The People’s Bank of China has lowered benchmark lending rates to fresh record lows, as it stepped up efforts to spur economic growth.

The 1-year loan prime rate, a benchmark for the majority of corporate and household loans, was reduced by 25 basis points to 3.1% at the October fixing.

The 5-year loan prime rate, a reference for property mortgages, was also cut by 25 basis points to 3.6%.

Both key rates were last reduced in July.

The latest move came after PBC Governor Pan Gongsheng indicated last week that the lending rates would be slashed by 20 to 25 basis points.

The Governor also indicated the reserve requirement ratio for commercial banks might be lowered further in the fourth quarter of 2024.

In September, the central bank initiated its most aggressive stimulus measures since the COVID-19 outbreak, including measures to prop up the troubled property sector.

The Chinese Yuan was 0.14% weaker on the day against the US Dollar, with the USD/CNY currency pair last trading at 7.1106.

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