China lowers mortgage reference rate by 25 basis points

Credit: REUTERS/TYRONE SIU

SHANGHAI, Feb 20 (Reuters) - China cut a benchmark reference rate for mortgages at a monthly fixing on Tuesday as authorities ramped up efforts to stimulate credit demand and revive the property market.

The five-year loan prime rate (LPR) CNYLPR5Y=CFXS was lowered by 25 basis points to 3.90% from 4.20% previously, while the one-year LPR CNYLPR1Y=CFXS was left unchanged at 3.45%.

In a Reuters poll of 27 market watchers conducted this week, 25 expected a reduction to the five-year LPR. They projected a cut of five to 15 basis points.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

China last trimmed the five-year LPR in June 2023 by 10 basis points.

(Reporting by Winni Zhou and Tom Westbrook. Editing by Sam Holmes)

((winni.zhou@thomsonreuters.com; +86 21 2083 0100; Reuters Messaging: winni.zhou.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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