China on Thursday announced it would cut interest rates in a bid to boost the economy, as it battles the economic fallout of the new coronavirus outbreak.
The reduction in the loan prime rate (LPR) — one of the preferential rates commercial banks give to their best customers and which serves as a reference for other lending rates — is the latest measure to help companies struggling through the epidemic.
The one-year LPR was lowered to 4.05 per cent from 4.15 per cent, the People’s Bank of China (PBoC) said in a statement.
The five-year LPR — on which many lenders base their mortgage rates — was also lowered to 4.75 per cent from 4.8 per cent.
The LPR, released on the 20th of every month, is based on rates of the central bank’s open market operations, especially medium-term lending facility rates.
The rate reduction comes as Beijing battles to control a virus epidemic that has infected more than 74,500 people in the country.
The outbreak is
threatening to put a dent in the global economy, with China paralysed by vast
quarantine measures and major firms such as iPhone maker Apple and mining giant
BHP warning it could
damage bottom lines.
On Thursday, the commerce ministry told an online press briefing that the epidemic would have a large impact on short-term consumption, with the strongest hit to be felt in February.
But it said there was
hope for consumer spending “to bottom out and stabilise in March”, said Wang
Bin, deputy director of market operations at