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China cut its key lending rate on Monday, hoping to boost an economy struggling with a sharp slowdown due to a prolonged property recession, tepid consumer spending and trade tensions.
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The People’s Bank of China cut short-term interest rates, and banks followed suit by cutting the key mortgage lending rate and the base annual lending rate by 10 basis points.
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The cuts follow last week’s twice-a-decade government meeting to discuss reforms, which failed to deliver major stimulus measures to boost the economy.
China cut its key lending rate on Monday in a bid to stimulate an economy still reeling from a crisis. sharp delay of a long-term real estate crisislukewarm consumer spending and trade tensions.
The People’s Bank of China cut a short-term policy rate, and Chinese banks followed suit, cutting their benchmark mortgage lending rate, the five-year prime loan rate, by 10 basis points, and the rate for most other loans, the one-year prime loan rate, by the same amount. The cuts came as a surprise, according to Bloomberg.
Rate cuts follow disappointing meeting last week
The cuts come after last week’s twice-a-decade meeting to discuss reforms by President Xi Jinping and top Communist Party officials failed to produce major stimulus measures to boost the economy. gross domestic product (gdp)) rose a weaker than predicted 4.7% year-on-year in the second quarter.
Yet analysts say that The Wall Street Journal said Monday’s rate cuts were too small and that the property sector’s problems, including the oversupply of properties, were too big to make a difference to the economy.
Read the original article at Investopedia.
