Chinese Banks Cut Borrowing Costs to Counter Economic Slowdown

A man flies a kite on the Bund against the backdrop of Shanghai's Lujiazui Financial District on April 10. Photo: Bloomberg

(Bloomberg) — Chinese banks lowered borrowing costs for the first time in 20 months, foreshadowing more monetary support to an economy showing strain from a property slump, weak private consumption and sporadic virus outbreaks.

The one-year loan prime rate (LPR) was set at 3.8% versus 3.85% in November, the first reduction since April 2020, according to a statement from the People’s Bank of China (PBOC) on Monday. The five-year loan prime rate, a reference for mortgages, was unchanged at 4.65%.