The Central Bank of China cut interest rates for the second time and announced another 10 basis point reduction
![The Central Bank of China cut interest rates for the second time and announced another 10 basis point reduction](https://sgsnsimg.moomoo.com/sns_client_feed/104645381/20240722/e9ddc20dcc7c02eca7385356b294bc90.jpg/big?area=104&is_public=true)
After the Third Plenary Session of the 20th CPC Central Committee came to an end this week, the People's Bank of China (central bank) announced today (22nd) that the July 1-year and 5-year loan market quoted interest rates (LPR) will be lowered by 10 basis points to 3.35% and 3.85%, respectively.
China's “Securities Times” pointed out that this is the second time this year that mortgage interest rates have been cut due to LPR adjustments.
Yan Yuejin, research director of the “Yiju Research Institute”, said that the interest rate cut was a “double drop,” that is, LPR with a term of 1 year and 5 years or more has been reduced, which fully indicates that the interest rate cut is comprehensive. This has a positive effect on the use of funds in the short to medium to long term. According to the repayment method of 1 million loan principal and 30 years of equal principal and interest, monthly interest expenses will be reduced by 55 yuan, and total mortgage interest will be reduced by nearly 0.02 million yuan.
The People's Bank of China also announced that from now on, the 7-day reverse repurchase operation in the open market will use fixed interest rates and volume tenders, and the operating interest rate will be adjusted from 1.8% to 1.7%.
According to the Chinese media “Shanghai First Finance”, in addition to the adjustment of the bidding method, the interest rate for the 7-day repurchase operation in the open market fell to 1.7% from the previous 1.8%, the first adjustment since August 2023. According to market analysis, interest rates for 7-day reverse repurchase operations were lowered by 10 basis points, which is conducive to increasing financial support for the real economy.
The National Bureau of Statistics of China recently announced that China's GDP for the second quarter grew 4.7% year-on-year, which was not as good as previously anticipated. Industry experts said that the People's Bank of China's decisive interest rate cut shows the determination of monetary policy to protect the economic recovery, and is a positive response to the demands of the Third Plenary Session of the 20th Central Committee to “unswervingly achieve economic and social development goals throughout the year.”
China's “Securities Times” pointed out that this is the second time this year that mortgage interest rates have been cut due to LPR adjustments.
Yan Yuejin, research director of the “Yiju Research Institute”, said that the interest rate cut was a “double drop,” that is, LPR with a term of 1 year and 5 years or more has been reduced, which fully indicates that the interest rate cut is comprehensive. This has a positive effect on the use of funds in the short to medium to long term. According to the repayment method of 1 million loan principal and 30 years of equal principal and interest, monthly interest expenses will be reduced by 55 yuan, and total mortgage interest will be reduced by nearly 0.02 million yuan.
The People's Bank of China also announced that from now on, the 7-day reverse repurchase operation in the open market will use fixed interest rates and volume tenders, and the operating interest rate will be adjusted from 1.8% to 1.7%.
According to the Chinese media “Shanghai First Finance”, in addition to the adjustment of the bidding method, the interest rate for the 7-day repurchase operation in the open market fell to 1.7% from the previous 1.8%, the first adjustment since August 2023. According to market analysis, interest rates for 7-day reverse repurchase operations were lowered by 10 basis points, which is conducive to increasing financial support for the real economy.
The National Bureau of Statistics of China recently announced that China's GDP for the second quarter grew 4.7% year-on-year, which was not as good as previously anticipated. Industry experts said that the People's Bank of China's decisive interest rate cut shows the determination of monetary policy to protect the economic recovery, and is a positive response to the demands of the Third Plenary Session of the 20th Central Committee to “unswervingly achieve economic and social development goals throughout the year.”
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment