The People’s Bank of China (PBOC) has been on a rate-cutting spree, lowering the interest rate on 700 billion yuan ($110.67 billion) of one-year medium-term lending facility loans to some financial institutions to 2.85% from 2.95% on Jan. 17, 2022. The PBOC then reduced the one-year loan prime rate to 3.7% from 3.8%, while the five-year loan prime rate was cut for the first time in nearly two years, lowering it by five basis points to 4.6% from 4.65%.
The Chinese economy shook off the COVID-19-pandemic-driven difficulties earlier than expected, but its economic growth has slowed due to muted consumer spending, tighter regulations, struggling property market and small businesses, and the rise in omicron variant cases. Consequently, the Chinese Central Bank has been easing its monetary policy to support the economy.
