China has reduced its one-year loan prime rate (LPR) by 10 basis points to 3.0%, marking the first cut since October 2023. The over-five-year LPR – a benchmark for mortgage rates – also dropped to 3.5%, signaling renewed efforts to stabilize financial markets and boost borrowing activity.
The move follows a 0.1 percentage point interest rate reduction announced earlier this month by People's Bank of China Governor Pan Gongsheng. Analysts suggest the cuts aim to lower financing costs for businesses and households amid efforts to revitalize economic growth.
Recent housing market data reveals stabilization trends, with April's commercial housing prices in 70 major cities showing flat or modest month-on-month declines. National Bureau of Statistics spokesperson Fu Linghui noted increased transaction activity in key urban markets, stating: "Price fluctuations remain within a reasonable range as policy adjustments take effect."
Economists predict the rate reductions could particularly benefit first-time homebuyers and small-to-medium enterprises, while reinforcing China's measured approach to economic stimulus. The coordinated monetary policy adjustments reflect Beijing's strategy to balance market confidence with long-term financial stability.
