China trims new benchmark lending rate again to shore up sputtering economy

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China trims new benchmark lending rate again to shore up sputtering economy
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China lowered its lending benchmark rate on Wednesday, as widely expected, to re...

SHANGHAI - China lowered its lending benchmark rate on Wednesday, as widely expected, to reduce company funding costs and shore up an economy hurt by slowing demand and U.S. trade tariffs.

Wednesday’s pruning of the loan prime rate followed China’s first cut in a short-term market rate in four years on Monday, suggesting the start of “a new easing cycle”, said Ji Tianhe, China head of foreign exchange and local markets strategy at BNP Paribas in Beijing, who says there is room for rates to go lower.

The lowering of the five-year rate, which is used to price housing mortgages, could suggest policymakers may be softening their cautious regulatory stance toward the property market, a major growth driver in the past, Capital Economics said in a research note. Still, the cut in the LPR was the third to a major policy rate this month, though the moves have been much more modest than easing by the U.S. Federal Reserve and some other central banks.

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