The one-year LPR was lowered by 5 basis points to 3.80% from 3.85% previously, while the five-year LPR remained at 4.65%.Register now for FREE unlimited access to Reuters.comTwenty-nine out of the 40 traders and economists polled by Reuters last week predicted cuts in LPR.Most new and outstanding loans in China are based on the one-year LPR while the five-year rate influences the pricing of home mortgages.
However, he noted the decision to keep the five-year rate unchanged showed Beijing preferred "not to use the property sector to stimulate economic growth." Some analysts expect Beijing could ease further to arrest the economic slowdown, although they remain divided over the easing trajectory. "We expect a further 45 bp of cuts to the one-year LPR during 2022," Mark Williams, chief Asia economist at Capital Economics, said in a note.Yan Se, chief economist at Founder Securities, said China's central bank lowered its interest rates by a smaller margin than global peers during the height of the pandemic last year, giving it room for additional easing now.
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