China cut the benchmark lending rate on Thursday, as the authorities move to lower financing costs for businesses and support an economy hit by a fast-spreading coronavirus epidemic, reported Reuters.
The one-year loan prime rate (LPR) was lowered by 10 basis points to 4.05% from 4.15% at the previous monthly fixing. The five-year LPR was lowered by 5 basis points to 4.75% from 4.80%.
The LPR cut followed a similar move in the central bank’s medium-term lending rate on Monday as policymakers sought to ease the drag to businesses from the coronavirus outbreak.
The LPR is a lending reference rate set monthly by 18 banks. The People’s Bank of China revamped the mechanism to price LPR in August 2019, loosely pegging it to the medium-term lending facility rate.