FILE PHOTO: The headquarters of the People’s Bank of China, the central bank, is pictured in Beijing, China, as the country is hit by an outbreak of the new coronavirus, February 3, 2020. REUTERS/Jason Lee
February 20, 2020
SHANGHAI (Reuters) – China cut the benchmark lending rate on Thursday, as widely expected, as the authorities move to lower financing costs for businesses and support an economy hit by a fast-spreading coronavirus epidemic.
The one-year loan prime rate (LPR) <CNYLPR1Y=CFXS> was lowered by 10 basis points to 4.05% from 4.15% at the previous monthly fixing.
The five-year LPR <CNYLPR5Y=CFXS> was lowered by 5 basis points to 4.75% from 4.80%.
All 51 respondents in a Reuters snap survey had expected a reduction in the LPR, with 38 respondents, or about 75% of participants, tipping a 10 basis points cut to both tenors. [nL4N2AJ22W]
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.
(Reporting by Winni Zhou and Se Young Lee; Editing by Shri Navaratnam)
