China has lowered its key mortgage interest rate by the most on record as it seeks to cut the economic impact of lockdowns and a property sector slowdown.
- The five-year loan prime rate was cut from 4.6% to 4.45% on Friday. The decline in the rate will directly lower the borrowing costs on outstanding mortgages across the country.
- A cut was largely expected after data this week pointed out deteriorating economic conditions across the economy, but the 15 basis point reduction surpassed analyst estimates.
- President Xi Jinping has intensified the nation’s strategy of eliminating the virus as the economy has slowed down sharply and the real estate sector has plunged into a significant decline.
The zero-Covid strategy limited case numbers significantly in the last two years, but over recent months has struggled to eliminate the outbreak of the highly infectious Omicron variant.
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Source: China’s Central Bank