China Cuts 5-Year Loan Prime Rate to Aid Struggling Property Sector, But Analysts Say Issues Run Deeper

• China's central bank cut its 5-year loan prime rate by 0.25 basis points to 3.95% in an effort to ease pressures on the struggling property sector • The 1-year loan prime rate was left unchanged at 3.45% • This was the first cut to the 5-year rate since May and the largest cut on record • The rate cut could help reduce pressure on the property sector by improving affordability and lowering mortgage rates • Analysts say the problems in the property industry stem from longer-term issues, not just interest rates, so market expectations need to be managed regarding the potential impact of incremental policy changes