The reduction in the over-five-year loan prime rate, a key reference for home mortgages, was greater than market expectations and the biggest on record, and will help reduce financial burdens on the real economy, stabilise the housing market and drive up growth in consumption and investment, they said.
The 15-basis-point drop was the biggest record and the second this year following one in January. Meanwhile, the one-year LPR came in at 3.7% on Friday, remaining unchanged for the fourth consecutive month, the centre said. The reduction in the over-five-year LPR, on which many lenders base their mortgage rates, will help reduce home purchase costs and household debt burdens, boost consumption and unleash reasonable housing demand, Wen said.
The rate decrease was greeted by China’s stock market on Friday, with the benchmark Shanghai Composite Index going up 1.6% to close at 3146.57 points, its highest level in a month.