China cuts benchmark mortgage interest rate, 1st in eight months

TOKYO, Feb 20 (KUNA) -- China's central bank cut its benchmark mortgage interest rate on Tuesday for the first time in eight months, the bank said.

The People's Bank of China announced that it has lowered the five-year loan prime rate, which is used to price mortgages, by 25 basis points from 4.20 percent to 3.95 percent, the first rate cut since June 2023. The central bank kept unchanged the one-year loan prime rate, a benchmark for corporate loans, at 3.45 percent.
Commenting on Tuesday's reduction, analysts said the reduction in the over-five-year rate was within expectation, but the extent exceeded market expectation, noting that the 25-basis-point drop marks the largest cut in recent years, state-run Xinhua News Agency reported. A lower loan prime rate is expected to shore up the credit and property markets, reduce the financial costs of businesses and individuals, and contribute to steady recovery of the world's No. 2 economy at the beginning of 2024, the report said. (end) mk.sa.