PBoC delivers smaller rate cut than expected
Move signals banks are under strain due to falling interest margins, analysts say
China’s central bank cut its one-year benchmark lending rate today but left its five-year rate unchanged, surprising many market analysts who expected more generous easing to support the faltering economy.
The People’s Bank of China cut the one-year loan prime rate (LPR) by 10 basis points from to 3.45% from 3.55%, while holding the five-year LPR at 4.2%.
Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate is a reference for mortgages.
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