SHANGHAI - China cut its new benchmark lending rate on Wednesday, as widely expected, moving to drive down funding costs and shore up an economy hurt by slowing demand and trade tariffs.
The LPR cut is the latest in a series of creeping reductions in interest rates as China tries to push commercial banks to lend more to small and medium businesses hurting from a slowing economy. The People’s Bank of China unexpectedly trimmed a closely watched lending rate on Monday, the first such cut in more than four years following a cut in the medium-term lending facility just two weeks ago, a signal to markets that policymakers are ready to act to prop up slowing growth.
The five-year LPR was also cut for the first time since its debut in August. It is a gauge the market uses to price housing mortgages.