China leaves benchmark lending rates unchanged, days after ‘historic’ steps to stabilise crisis-hit property sector

One-year loan prime rate (LPR) kept at 3.45 per cent, while the five-year LPR was left unchanged at 3.95 per cent

Last week, China announced ‘historic’ steps to stabilise its crisis-hit property sector

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China left benchmark lending rates unchanged on Monday having last week announced ‘historic’ steps to stabilise its crisis-hit property sector. Photo: Xinhua

Published: 10:28am, 20 May 2024

China left benchmark lending rates unchanged at a monthly fixing on Monday, in line with market expectations.

The steady monthly loan prime rate (LPR) fixings come after China announced “historic” steps last week to stabilise its crisis-hit property sector, with the central bank facilitating 1 trillion yuan (US$138 billion) in extra funding and easing mortgage rules, in an attempt to revive housing demand.

The property rescue plan effectively reduced the urgency to further cut benchmark lending rates, at a time aggressive monetary easing could pile additional pressure on the weakening currency.

The one-year LPR was kept at 3.45 per cent, while the five-year LPR was unchanged at 3.95 per cent.

In a Reuters survey of 33 market participants conducted last week, 27 expected both rates to stay unchanged.

China would cut interest rates of mortgage loans and down-payment ratios for homebuyers to boost lacklustre property demand, according to statements released by the central bank on Friday.

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