China's Central Bank Cuts Loan Rates to Boost Economy

China's central bank has lowered its five-year and one-year loan prime rates in an effort to revive the property sector and invigorate the slowing economy. This rate cut comes as the nation faces challenges in recovering from the COVID-19 pandemic and a downturn in the property market.

China's central bank has cut both its five-year loan prime rate and its one-year rate, moving to revive its ailing property sector and rev up the slowing economy.

The five-year rate, which is a benchmark for mortgages, was cut by 10 basis points to 3.85% from 3.95%. The one-year rate was reduced to 3.35% from 3.45%.

The People's Bank of China also reduced collateral requirements for its medium-term lending facility for banks. It said that was intended to ease pressure on the bond market.

The world's second largest economy has struggled to regain momentum since the COVID-19 pandemic and a slump in the property market has been a major hindrance.

Economic growth fell to 4.7% in the last quarter, but remained at the government's target rate of about 5% for the first half of the year.

(With inputs from agencies.)