China’s central bank on Monday announced cutting two key interest rates to historic lows, in what is seen as the latest move by Beijing to boost sluggish spending and kickstart the world’s second-largest economy.
The one-year Loan Prime Rate (LPR), which constitutes the benchmark for the most advantageous rates lenders can offer to businesses and households, was cut from 3.35 per cent to 3.1, while the five-year LPR, the benchmark for mortgage loans, was cut from 3.85 to 3.6 per cent.
Both rates were last reduced in July and are sitting at all-time lows, AFP reported.
Data showed Friday the economy grew 4.6 per cent in the third quarter, its slowest rate in a year and a half.
The cuts come just days after the country posted its slowest quarterly growth in a year and a half, underlining the deep economic woes the country faces.
Leaders are targeting annual growth of 5 per cent this year, but that goal is being challenged by weak consumption and a prolonged and debilitating debt crisis in the colossal property sector.
Authorities acknowledged a “complicated and severe external environment… as well as new problems of domestic economic development”, the report said.
Beijing has said it has “full confidence” in achieving its annual growth goal, but economists say more direct fiscal stimulus is needed to revive activity and restore business confidence.
The disappointing data came after weeks of announcements and news conferences about an eagerly awaited stimulus plan, though investors say they are still waiting to see more details.
The country’s top banks on Friday cut interest rates on yuan deposits for the second time this year in another potential boost to spending.
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