China reduces benchmark lending rates
Published : Thursday, 20 February, 2020 at 5:26 PM Count : 151
China on Thursday said it lowered its benchmark lending rate - a move expected by analysts around the world as a result of a deadly coronavirus outbreak in the world’s second-largest economy.
The People’s Bank of China, the country’s central bank, has cut the prime rate for one-year loan from 4.15% to 4.05%, and the five-year rate from 4.80% to 4.75%. The PBOC publishes rates every month. Thursday’s move was the first cut since October last year, according to Refinitiv data.
Their debt prime rate is the interest rate that banks take from their most creditworthy clients. PBOC, last year, reiterated China’s interest rate system, forcing commercial lenders to provide reference to the original rate of loan while setting a new loan price.
Cutting the one-year and five-year loan prime rates on Monday, the central bank has followed steps to reduce lenders’ interest rates from 3.25% to 3.15% in its one-year medium-term financing facility.
Financing rates in China come at a time when authorities stopped numerous economic activities across the country as a race to spread a new coronavirus - now known as COVID-19 - believed to have begun in the city of Wuhan, the capital of Hubei.
Some analysts say Thursday’s move could only help the Chinese economy so much.-Internet