26 C
Dubai
Tuesday, February 11, 2025
spot_img

China reduces primary interest rate to bolster economy

China’s central bank cut a key interest rate to counter COVID-induced growth slowdown in the second-largest global economy. Labour market uncertainty and global economic sluggishness have hindered activity, weakening demand for Chinese goods.

The struggling real estate sector, with major developers facing bankruptcy and project delays, adds to growth challenges.

Following a recent similar move, the central bank lowered the one-year loan prime rate from 3.55% to 3.45%, aiming to stimulate economic activity.

The five-year LPR for mortgage pricing remained at 4.2%. These historic lows are intended to encourage more favorable loans from commercial banks.

This action goes against the trend of rising global interest rates aimed at curbing inflation. China’s post-COVID recovery, since the end of 2022, has lost momentum. Household loans hit a 2009 low, indicating a faltering recovery.

The central bank also reduced its medium-term lending facility rate and regulators discussed “financial support” to manage risks.

Analysts expected a more substantial LPR cut, and market response was unenthusiastic, with Hong Kong and Shanghai stocks falling.

The central bank’s decision coincides with property giant Country Garden’s crisis and ongoing growth challenges tied to consumption, labor market uncertainty, and global economic slowdown.

Amidst grim figures, officials face pressure to introduce an economic recovery plan, though Beijing’s cautious approach due to debt concerns is evident. Authorities are focusing on supporting the private sector and consumption.

The economic slowdown threatens the five-percent growth target, with Beijing defending its ability to sustain global growth despite Western skepticism.

Next Article

Related Articles

Albeesmart Interior Turnkey Solution: Revolutionizing Interior Design with Innovation

Founded by Alban Dickqrose, Albeesmart Interior Turnkey Solution is a company driven by a passion for transforming spaces into aesthetically appealing, functional environments. The Spark...

Relaxopod Systems India: Pioneering Floatation Therapy in India

Imagine a place where stress melts away, the mind finds stillness, and the body rejuvenates—without the need for pharmaceuticals or elaborate treatments. This is...

France and UAE Forge $50 Billion AI Data Centre Partnership to Drive Innovation

France and the United Arab Emirates have announced a landmark collaboration to develop a 1-gigawatt artificial intelligence data centre, with investments ranging between $30...

Greens Push for NBN CEO Pay Cut Amid Cost-of-Living Crisis and Privatization Debate

Greens Call for NBN CEO Salary Cut Amid Cost-of-Living Crisis and Privatization Concerns The Australian Greens have intensified their push for a reduction in the...

The Resilient Journey of Subhendra Basu: Innovation in Cybersecurity

Subhendra Basu’s career trajectory is a powerful story of resilience, perseverance, and intellectual curiosity. With over 24 years of experience across major technology companies...

Latest Articles