China’s central bank has cut benchmark loan rates, seeking to boost the economy that has been battered by the government’s strict zero-Covid policy and a slump in the property market.
The one-year Loan Prime Rate (LPR), which serves as a benchmark for corporate loans, was reduced from 3.7% to 3.65%, the People’s Bank of China (PBOC) said in a statement.
The five-year LPR, which is used to price mortgages, was cut from 4.45% to 4.3%.
China’s economic growth came in at just 0.4% year-on-year in the second quarter, its slowest rate since the global COVID-19 pandemic struck in 2020.
China’s economy also unexpectedly slowed in July, with the factory and retail activity squeezed by Beijing’s zero-Covid policy and a property crisis.
The world’s second-biggest economy narrowly escaped a contraction in the June quarter, hobbled by the lockdown of the commercial hub of Shanghai, a deepening downturn in the property market and persistently soft consumer spending.
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