China cuts 1-year lending rate, keeps 5-year unchanged
China cut its one-year benchmark lending rate on Monday, as expected, as authorities seek to ramp up efforts to stimulate credit demand, but kept the five-year rate unchanged. The recovery in the world's second-largest economy has lost steam due to a property slump, weak consumer spending and tumbling credit growth. The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.45 percent from 3.55 percent previously, while the five-year LPR was left at 4.2 percent. 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 cut both LPRs in June to boost the economy. The reduction in the one-year LPR came after the People's Bank of China lowered its medium-term policy rate last week. The central bank has also pledged to keep liquidity reasonably ample and its policy "precise and forceful" to support the economic recovery, amid rising headwinds, according to its second-quarter monetary policy implementation report. (Reuters)