SHANGHAI—China cut its lending benchmark loan prime rate (LPR) for the first time in 20 months on Monday, in a bid to prop up growth in the slowing economy, although it remains wary of loosening conditions in the country’s highly leveraged property market. The one-year LPR was lowered by 5 basis points to 3.80 percent from 3.85 percent previously, while the five-year LPR remained at 4.65 percent. The reduction marks the first LPR cut since April 2020. Twenty-nine out of the 40 traders and economists polled by Reuters last week predicted cuts in LPR. Most new and outstanding loans in China are based on the one-year LPR while the five-year rate influences the pricing of home mortgages. “The cut reinforces our view that authorities are increasingly open to cutting interest rates amid looming economic headwinds,” said Xing Zhaopeng, senior China strategist at ANZ. However, he noted the decision to keep …
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