For the second time this year, the People Bank of China opted to cut bank lending interest rates to stimulate the economy after the hard hit of the coronavirus outbreak.
The PBOC slashed its one-year loan prime rate (LPR) to 3.85 percent from 4.05 percent, while reduced the five-year LPR from 4.75 percent to 4.65 percent.
By charging companies lower interest rate on loans, the Chines central bank aim to support the firms after the lockdowns and tough restrictions imposed to contain the spread of the Covid-19, whilst the reduction in the five-year benchmark should prevent property prices from rising.
Today’s rate cut was widely predicted, following last week’s cut in the one-year medium-term lending facility (MLF) loans to financial institutions to 2.95 percent, the lowest since September 2014.
The gross domestic product (GDP) in the world’s second-biggest economy came in at -6.8 percent in the January-March period on annual basis, marking the first contraction on record.
Out of 82,747 coronavirus cases in China, 77,084 managed to recover, noting that it has lately added just 12 new cases.
The onshore yuan was 0.04 percent down at 7.0742 per dollar, as of 08:10 GMT.
China CSI 300 index soared 0.36 percent to finish at 3,853.46 points on Monday, where Asian stocks ended trading today on a mixed note.
Next week, China will
publish its manufacturing and services data for April, which will track the
economic damage caused by the Covod-19 with the beginning of the second quarter.