China Seeks to Stabilize Property Crisis as PBOC Urges Lending
- Banks cut a reference rate for mortgages by 15 basis points
- $29 billion of special loans to be channeled to developers
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Chinese lenders lowered their benchmark rates and the central bank urged them to maintain steady loan growth as Beijing deploys more levers to alleviate a worsening housing crisis.
The five-year loan prime rate, a reference for mortgages, was reduced by 15 basis points to 4.3% after being cut by the same magnitude in May. The People’s Bank of China on Monday urged lenders, especially major state-owned banks, to boost loans to the real economy. The moves follow Friday’s announcement of special loans being offered to property developers in a program that could be worth 200 billion yuan ($29.3 billion), according to people familiar with the discussions.