China cuts interest on home loans

China cut its benchmark mortgage interest rate on Thursday as monetary authorities stepped up efforts to bolster a sluggish economy after data earlier in the week indicated a bleak outlook for the country’s troubled real estate sector.

The benchmark interest rate cut on one-year and five-year loans came in the wake of China’s central bank surprise cuts in short- and medium-term loan interest rates on Monday, and came just days after the announcement. Deputy Central Bank Governor Willingness to Take Further Measures in future.

With the real estate slowdown continuing into 2022 and the spread of the mutant Omicron discouraging consumer activity, many analysts say that tale monetary easing will be needed, even as other large economies, including the US, prepare to tighten monetary policy quest’year. .

Economic data for December showed further declines in consumption and the real estate sector, both key drivers of growth.

During a monthly interest rate briefing on Thursday, China lowered its one-year benchmark loan rate by ten basis points to 3.70% from 3.80%.

It also reduced the base interest rate on five-year loans by five basis points from 4.65% to 4.60%, the first such cut since April 2020.

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