China once more decreases interest rates to combat slowing economic expansion.
Once more, China's monetary authority has decided to tackle the ongoing economic slump in the nation by decreasing interest rates. The central bank announced a reduction in the one-year loan prime rate from 3.35% to 3.10%, and the five-year loan prime rate from 3.85% to 3.60%. The five-year loan prime rate, significant for mortgage loans, was the focus of this adjustment.
The housing market's slump has been a persistent challenge for China, the world's second-biggest economy, after a period of significant expansion. In the third quarter, the economy saw a revival with a growth of 4.6%, marking the slowest pace since the start of 2023. This growth rate fails to meet the communist party's goal of 5% annual expansion. In response, the authorities are deploying multiple strategies to counteract the sluggishness.**
The reduction in interest rates on mortgage loans could potentially stimulate the housing market, which has been struggling within China's economy. The health of the economy as a whole, including its key sectors like real estate, remains closely tied to the performance of the world's second-biggest economy, China.
