China has lowered its benchmark Interest rates by 25-basis points as it tries to revive its slumping economy.
The country’s one-year prime rate has been reduced to 3.1%, while the five-year lending rate has been cut to 3.6%, according to the People’s Bank of China (PBOC).
The one-year interest rate is charged on corporate and household loans in China, while the five-year rate serves as a benchmark for mortgage rates in the nation of 1.4 billion people.
The move was widely expected by China’s central bank and comes as the government in Beijing tries to revive the world’s second biggest economy, which is struggling with weak consumer spending and a debt crisis in the property sector.
China recently reported slightly better than expected third-quarter gross domestic product (GDP) growth of 4.6% year-over-year.
However, economic growth in China remains below the government’s annualized target of 5%.
China’s central bank also announced that the cash that banks need to have on hand, known as the reserve requirement ratio, could be lowered by up to 50-basis points by year’s end.
In September, China’s central bank lowered its reserve requirement ratio for banks by 50-basis points.
