China’s central bank cuts medium-term lending rate

SHANGHAI: China’s central bank cut the interest rate on its medium-term lending yesterday as policymakers sought to ease the drag to the businesses from a coronavirus outbreak that has severely disrupted activity.

The move is expected to pave the way for a reduction in the country’s benchmark loan prime rate (LPR), which will be announced on Thursday, to lower borrowing costs and ease financial strains on companies hit by the virus epidemic.

The People’s Bank of China (PBOC) said it was lowering the rate on 200 billion yuan (RM118.7 billion) worth of one-year mediumterm lending facility loans to financial institutions by 10 basis points to 3.15% from 3.25% previously.

The central bank attributed the move to keep banking system liquidity “reasonably ample” to counter factors including maturing reverse repos, but it did not address the specific reason for the rate move.

Meanwhile, new home prices in China grew at their weakest pace in nearly two years in January as the economy slowed and a fastspreading coronavirus outbreak brought the country’s property market to a standstill.

Average new home prices in China’s 70 major cities rose 0.2% in January from the previous month, lower than a 0.3% gain in December and marking the slowest pace since February 2018, Reuters calculated based on National Bureau of Statistics data yesterday.

On a year-on-year basis, home prices rose 6.3%, slowing from a 6.6% rise in December, hitting an 18-month-low. – Reuters