In China, the 5-year loan prime rate was reduced by 15 basis points to 4.45 percent. The 1-year loan main interest rate was kept at 3.7 percent.
A record reduction in loan interest came in China, where the economy deteriorated due to Covid measures. The 5-year loan main interest rate, which is also an indicator for mortgage rates, was reduced by 15 basis points to 4.45 percent. Economists had expected a 5-10 basis point cut.
The 1-year loan main interest rate was kept at 3.7 percent. The record-cut decision came after the mortgage interest rate cut. On Sunday, the People’s Bank of China (PBOC) reduced the mortgage interest rates for first-time homebuyers from 4.6 percent to 4.4 percent to prevent the contraction in the housing market.
While the epidemic measures in China showed their effect on the economy, foreign institutions also revised their expectations downwards. One of the last institutions to change their expectations was Goldman Sachs of the USA. The bank cut its 2022 growth forecast for China from 4.5 percent to 4 percent.