China’s Central Bank Has Cut a Benchmark Rate for the First Time Since Pandemic

The People’s Bank of China for the first time since April 2020 has cut benchmark rate on Monday.

The central bank has lowered the one year prime rate to 3.8% from 3.85%. However, the five year prime rate remained unchanged from prior month at 4.65%.

The last time the central bank cut the one year and five year LPR was in April 2020, according to data from Wind Information as reported by CNBC.

The LPR rate affects the lending rates for corporate and household loans. Last week, the central bank has cut reserve requirement in an effort to boost liquidity in the economy.

Mainland’s broad market index Shenzen Composite Index (.SZSC) and the CSI300 is trading in the red down by 0.61% and 0.43% respectively.