China s state banks are planning to cut rates on existing mortgages in an effort to boost consumer spending. The reductions will only apply to loans on first homes. Additionally, lenders such as Industrial & Commercial Bank of China and China Construction Bank are expected to cut deposit rates for a third time in a year.
Property Debt Crisis In China: The Chinese property sector is in a deepening crisis with a rising risk of default among some developers as they struggle to sell apartments and raise funds.
Closely followed by the markets, the two rates are now at historic lows, after previous reductions in June. The decision is intended to encourage commercial banks to grant more loans and at more advantageous rates. Monday s measures which run counter to rising interest rates around the world as other major economies work to curb inflation will indirectly support economic activity as China s growth flags.
People s Bank of China is expected to get announce rate cut decision on Monday. Other than China, two other Asian econmies are set to announce interest rate change this week. Bank of Korea and Bank Indonesia both expected to keep interest rates on hold on Thursday
China s central bank trimmed its one-year lending rate by 10 basis points and left its five-year rate unmoved, a surprise to analysts who had expected cuts of 15 basis points to both