Posted 2/20/2024, 5:25:00 AM
China Slashes Key Interest Rate to Prop Up Ailing Housing Market as Economy Slows Sharply
- China's central bank cut its 5-year loan prime rate by 25 basis points to 3.95%, the biggest reduction since it revamped its LPR system in 2019
- The rate cut is aimed at supporting the housing market and reducing pressure on the property sector
- China's economy has slowed sharply due to a real estate crisis that began in 2021 and has led to developer defaults
- Beijing has introduced measures like lower interest rates and easing home purchase restrictions to revive the property sector
- Foreign investment in China dropped 82% in 2023 to $33 billion, the lowest since 1993, as companies grow wary of economic and political risks