In a surprising move, China cuts interest on mortgage-backed loans

China’s central bank cut the interest rate for five-year loans that support mortgages, by a wide and unexpected margin, the second rate cut this year, at a time when the interest on one-year loans is fixed.

The five-year loan interest rate was lowered to 4.45% from 4.6%, the largest drop since in 2019, as Beijing aims from the move to support the faltering real estate sector and revive the economy after the recent closures.

On the other hand, the one-year key interest rate was kept unchanged at 3.7%, which is contrary to market expectations, which estimated a cut of five to 10 basis points.

It is noteworthy that this news played a role in the rise of Asian markets on Friday.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.