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China’s Property Loans Rise to a 2-Year High on Policy Support
CHINA, JUL 21 – China maintained the 1-year loan prime rate at 3.0% and the 5-year rate at 3.5% amid slowing GDP growth and weak retail sales, with analysts expecting further support measures.
- On Monday, the People's Bank of China held its benchmark lending rates steady, maintaining the 1-year loan prime rate at 3.0% and the 5-year rate at 3.5%.
- With GDP growth in the second quarter at 5.2% and June retail sales at 4.8%, signaling waning momentum, influencing the rate decision.
- Highest new bank lending in three months highlights credit resilience, as the one-year loan prime rate influences corporate and most household loans, while the five-year LPR benchmarks mortgage rates.
- Following the decision, the offshore yuan was flat at 7.179 as analysts noted low urgency for further easing.
- Nomura analysts said China may be forced to enact support measures in the second half of the year, suggesting policymakers will act as fundamentals could worsen visibly in H2.
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The cooling of the housing market has also affected the scale of new mortgage loans underwritten by banks. On the 22nd, the Central Bank announced that the amount of new home purchase loans underwritten by the five major banks in June was NT$66.378 billion, a decrease of NT$5.844 billion from May. The cumulative amount in the first six months was NT$408.88 billion, a year-on-year decrease of about 26%.
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Leaning Left2Leaning Right1Center2Last UpdatedBias Distribution40% Left, 40% Center
Bias Distribution
- 40% of the sources lean Left, 40% of the sources are Center
40% Center
L 40%
C 40%
R 20%
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