China cut its key lending rates by 10 basis points on Tuesday, as a stronger yuan and easing trade tensions offer it room for monetary easing aimed at boosting its economy.
The People’s Bank of China reduced the one-year loan prime rate (LPR) from 3.1% to 3.0% and adjusted the five-year LPR from 3.6% to 3.5%.
This adjustment represents the first rate cuts since the central bank made a 25-basis-point reduction in October, highlighting Beijing’s increased efforts to bolster economic resilience.
These benchmark lending rates, generally extended to preferred clients of banks, are recalibrated monthly based on rates suggested by a selection of commercial banks to the People’s Bank of China. The one-year LPR affects corporate and most consumer loans, whereas the five-year LPR is crucial for mortgage rates.