PBOC cuts policy interest rate to 3.1 percent, more than estimates
Date
10/21/2024 5:40:30 AM
(MENAFN) The People's bank of China has officially announced a reduction in its policy interest rate by 25 basis points, bringing it down to 3.1 percent. This decision, made public on Monday, comes as market expectations had anticipated a slightly higher rate of 3.15 percent for the one-year loan prime rate during the bank's meeting.
Previously, the bank had lowered the interest rate from 3.45 percent to 3.35 percent in July and maintained it during its last two meetings. In addition to the policy rate adjustment, the bank also reduced the five-year loan prime rate by 25 basis points to 3.6 percent. These changes are expected to stimulate the real estate and credit markets, especially in light of the ongoing contraction in the real estate sector, while also easing financial pressures on individuals and businesses.
The decision to lower rates comes after third-quarter growth figures released last week indicated that China's economy has not met the government's growth targets for the year so far. Specifically, China's economy expanded by 4.6 percent in the third quarter of 2024 compared to the same period last year, falling short of expectations.
The rate cut reflects the bank's commitment to support economic growth amid challenging conditions, particularly in the real estate sector. By making borrowing cheaper, the People's Bank of China aims to encourage investment and consumer spending, which could help bolster overall economic performance in the upcoming quarters.
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