PBOC upholds key interest rates amid economic stabilization measures
Date
5/20/2024 7:19:20 AM
(MENAFN) China's central bank, the People's Bank, opted to keep its key one-year loan rate steady at 3.45 percent on Monday, maintaining continuity from the previous month. Simultaneously, the prime interest rate for loans exceeding five years, which serves as a benchmark for mortgage rates, remained unchanged at 3.95 percent, as reported by the National Center for Interbank Finance.
The decision to maintain interest rates was widely anticipated by economists surveyed by Reuters, who expected no changes in both the one-year and more than five-year loan rates. This move follows China's reduction of the key interest rate for loans exceeding five years by 25 basis points to 3.95 percent last February, marking the most significant rate adjustment in recent years. Meanwhile, the one-year loan rate remained static during the same period, as reported by the Chinese state news agency, Xinhua.
The decision to hold interest rates steady aligns with China's broader economic objectives, aiming to support credit and real estate markets while reducing financial burdens for businesses and individuals. These measures are anticipated to contribute to a stable economic recovery amidst ongoing global uncertainties.
Monthly interest rate adjustments serve as a crucial reference point for banks in determining their lending rates, particularly those linked to the central bank's open market operations rates, including the medium-term lending facility rate. Furthermore, in a related move, the People's Bank of China conducted seven-day reverse repurchase operations totaling two billion yuan (approximately $281.52 million) on Monday, with an interest rate set at 1.8 percent.
These coordinated measures underscore the central bank's commitment to maintaining stability and promoting sustainable economic growth, as China continues to navigate through evolving domestic and international economic dynamics.
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