The Chinese authorities have once again lowered its benchmark lending rate in an attempt to mitigate the economic fallout from the COVID-19 pandemic. Economists expect these measures to help China’s economic recovery.
On Monday, April 20, China cut its lending benchmark rate for the second time this year. This move of the government is aimed at the reduction of borrowing costs for companies and the support of China’s economy affected by the coronavirus epidemic.
This time, the one-year loan prime rate (LPR) was eased by 20 basis points to 3.85% while the five-year LPR was slashed by 10 basis points to 4.65%. According to analysts, the majority of new and existing loans are based on the LPR. Meanwhile, the pricing of mortgages is defined by the five-year rate.
The recent reduction of the lending benchmark rate largely coincides with expert forecasts.