MNI BRIEF: LPR Cut Benefits Consumption - Financial News
The hefty cut to Loan Prime Rate's five-year plus tenor will benefit investment and consumption while reducing interest payment of house buyers, Financial News, a newspaper affiliated with the central bank, reported on Tuesday.
The newspaper said the promotion of stable real-estate sector development in 2024 was crucial, with the moderate reduction of residential mortgage interest rates a key strategy. The paper noted the reduced interest expenses will boost recovery in consumer spending. (See MNI PBOC WATCH: Hefty 5Y LPR Cut Aimed At Mortgage Support)
A lower interest rate will help support the economy as it struggles with insufficient demand and weak expectations, the commentary piece noted, adding the reduction impacts medium to long-term loans and will not pressure the interest margin of lenders considering the decrease in deposit rates.