The central bank of China has announced that it will reduce the de facto policy rate.
The cut is for the second consecutive month, with the aim of supporting the slowing economy with further monetary easing.
The Central Bank of China and the People's Bank of China announced on the 20th that the one-year interest rate of the index "LPR", which is a guideline for financial institutions to lend to companies, will be reduced by 0.1% to 3.7%. did.
The LPR is the de facto policy rate, which has been reduced for the second straight month.
In the Chinese economy, the growth rate of GDP = gross domestic product for the three months up to last month was + 4.0% compared to the same period of the previous year, and the growth rate has decreased compared to the previous three months, and the slowdown continues. ..
Furthermore, the outbreak of the new coronavirus is spreading in various places, and the outlook is becoming more uncertain, with the aim of supporting the economy through further monetary easing.
We also reduced the 5-year LPR, which is a guideline for mortgage rates, by 0.05%.
The reduction is the first in 1 year and 9 months.
The tightening of regulations by the authorities against overheating of the real estate market has worsened market conditions and is one of the factors behind the economic slowdown, so it seems that there are speculations to prevent further declines.
The Chinese government has set "stability-oriented" as its economic policy policy, and while the United States and other countries are moving toward tightening monetary policy in order to respond to inflation, China will continue to ease monetary policy depending on the situation. There is a view that there is a possibility.