Politics

CHINA GOES THE OPPOSITE WAY TO THE U.S. – IN SOFT LANDING MODE, BEIJING CUTS KEY MORTGAGE RATE AS ITS COVID LOCKDOWNS HELP IT TO COOL ITS FIERY ECONOMY – EVEN AS U.S. HEADS INTO A VIOLENT BUST CYCLE AFTER BEING FORCED TO JACK UP INTEREST RATES IN BID TO REIN IN SELF-INFLICTED INFLATION – GUESS WHO WILL REBOUND, WHO WILL STAY DOWN FOR A LONG, LONG WHILE

China cuts key mortgage reference rate as Covid bites Beijing’s unrelenting approach to Covid-19 outbreaks has snarled supply chains and locked down tens of millions of people, hitting major financial, industrial and tourist hubs. BEIJING ― China today announced it would cut a key interest rate in a boost to home buyers and debt-mired developers as the country’s economy is slowed by Covid-19 restrictions ripping across major cities. Prolonged virus lockdowns have constricted supply chains, quelled demand and stalled manufacturing in the last major economy welded to a zero-Covid approach to the pandemic. The five-year loan prime rate (LPR) ― which many lenders base their mortgage rates ― was trimmed to 4.45 per cent from 4.6 per cent, China’s central bank said today. Since the rate is “the benchmark for pricing most mortgages, we think the move is aimed at supporting housing demand,” Julian Evans-Pritchard, an analyst at Capital Economics, said. The cut “should help drive a revival in housing sales.” The one-year loan prime rate, which guides how much interest commercial banks charge to corporate borrowers, remained unchanged at 3.7 per cent. The reduction in the mortgage reference rate comes as a wave of defaults ripples through the country’s […]


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