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| China continues to cut two important interest rates to boost the economy . (Source: Xinhua) |
Accordingly, the 1-year loan prime rate (LPR) was adjusted down 10 basis points to 3.55%, while the 5-year term also decreased from 4.3% to 4.2%.
The latest rate cut follows two monetary easing moves last week.
The PBOC cut the one-year medium-term lending facility to 2.65% from 2.75% on June 15. It also lowered the seven-day reverse repo rate for the first time since August 2022 from 2% to 1.9%.
The decision will effectively lower real lending rates, reduce financing costs, stimulate credit demand and strengthen the growth momentum of consumption and investment, said the National Institute of Finance and Development.
The PBoC’s recent rate moves come amid fresh data showing that China’s economy continues to struggle. Through monetary policy easing, leaders are trying to boost growth after the expected economic recovery following three years of lockdowns has lost momentum.
China's efforts contrast with moves by the United States and other Western nations - which have been forced to implement a series of interest rate hikes while reducing money supply to curb inflation.
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