A man looks at his smartphone as he walks past the People’s Bank of China building on May 20, 2022 in Beijing.
Jiang Qiming | China News Service | beautiful pictures
China cuts key lending rates again on Monday, one week after two rate cuts in a sudden move.
The moves are seen as an attempt to revive credit demand and boost an economy hurt by prolonged Covid lockdowns and asset debt problems.
The People’s Bank of China cut its five-year loan by 15 basis points from 4.45% to 4.30% and reduced its one-year loan by 5 basis points to 3.65%.
Most new loans in China are based on a one-year LPR.
Last week, the Bank of China lowered the medium-term lending facility (MLF) lending rate by 10 basis points for a number of financial institutions. It also cut the seven-day reverse repo rate by 10 basis points to 2%.
Analysts such as Navigate Commodities chief executive Atilla Widnell said the positive reaction to last week’s rate change was short-lived.
“The new monetary easing/stimulation is seen as futile as the ‘reckless horse,’ as the Chinese economy desperately needs consumers back on the streets spending money,” he said in a note.
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