The People’s Bank of China on Monday cut its benchmark lending rate for the time in 20 months, following the reduction of its reserve requirement ratio last week.
- The Chinese central bank reduced its one-year loan prime rate to 3.8% from 3.85% while retaining its five-year loan prime rate at 4.65%. They will cover both corporate and household loans.
- The latest reduction is the last time the PBOC cut its one-year LPR in 20 months after the last cut was decided upon in April 2020, according to data from Wind Information.
- Officials of the central bank last month reiterated that stability will be a priority in 2022, with the need for prudent monetary policies to remain flexible and appropriate, while liquidity should be reasonable and ample.
It is the second movement of the central bank this year after it reduced the reserve requirement ratio which took effect last week.
MCHI is down 1.72% premarket.