China Banks Cut Key Rate by Record to Boost Ailing Economy

(Bloomberg) — Chinese banks cut a key interest rate for long-term loans by a record amount, a move that would reduce mortgage costs and may boost weak loan demand amid a property slump and Covid lockdowns.

The five-year loan prime rate, a reference for home mortgages, was lowered to 4.45% from 4.6%, down by the most since a revamp of the rate in 2019, according to a statement by the People’s Bank of China Friday. A majority of economists surveyed by Bloomberg had predicted a cut by five to 10 basis points.