Official announcements from the People's Bank of China

China's Central Bank Cuts Rates by 50 Bps to Boost Economy and $5.3 Trillion Property Sector

Sep 29, 2024, 02:32 PM

China's central bank has unveiled a comprehensive policy package aimed at boosting the economy and addressing the struggling property sector. This includes cutting the reserve requirement ratio, reducing policy interest rates, and lowering mortgage rates for existing home loans by around 50 basis points. The People's Bank of China (PBOC) announced that all commercial banks must lower interest rates on all existing mortgages by October 31 to no less than 30 basis points below the PBOC's loan prime rate. Additionally, the central bank has cut its Standing Lending Facility interest rates and eased rules on second home purchases. By October 12, 18 national commercial banks need to release their plans for adjustments. These measures are part of China's efforts to inject liquidity, stimulate growth, and prevent deflation as the country faces economic challenges, including the risk of missing its official GDP-growth target for the year. The policy changes aim to lower borrowing costs on up to $5.3 trillion in mortgages.