Chinese Banks Disappoint With Modest Cut to Mortgage Reference Rate

(Bloomberg) — Chinese banks followed the central bank by lowering their benchmark lending rates on Tuesday, although a relatively modest reduction to the mortgage reference rate disappointed investors.

The one-year and five-year loan prime rates were reduced by 10 basis points each, according to a statement by the People’s Bank of China (PBOC). 

While that was in line with the reduction in the PBOC’s policy rates last week, some economists had predicted a bigger reduction of 15 basis points in the five-year rate, a reference for mortgages, to support the ailing housing market.