The Central Bank of China is easing the monetary policy: they have lowered the LPR (loan prime rate) from 4.05% to 3.85%.
The interest rate has been reduced by the regulator for the second time since the beginning of the year. It is assumed that this measure will help the business recover. This step should be especially effective to help small companies.
The rate was also lowered on loans with the maturity of five or more years. The new value is now 4.65% (was 4.75%).
The Chinese regulator revises the values of base interest rates on the 20th of each month.
The rate cut is a completely expected step, since a week earlier it became known about the value of China’s GDP for the first quarter of this year. It turned out that the decline in GDP was 6.8%. Such a sharp decline has pointed to an objective picture of the damage caused to the Chinese economy by the coronavirus pandemic.
In January-March 2020, the net profit of China’s industrial enterprises decreased by 58.8%.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group