China abolishes floor on lending rates

The People’s Bank of China (PBoC) has scrapped a floor on the discount banks can offer to borrowers, with lenders now free to set their own interest rates, Bloomberg reported, citing a statement by the central bank late Friday. Banks were previously restricted to offering a discount of no more than 30% below the benchmark rate. However, a limit on mortgage rates and a cap on deposit rates, currently 10% higher than the PBoC benchmark rate, will remain. On July 20, the PBoC urged banks to continue lending and to set interest rates “reasonably.”