The Chinese Central Bank lowered, Thursday, January 19, one of its reference interest rates in order to support the economy. This is the second drop in a month after that of December 20, 2021, when the issuing institute cut its rate for the first time in almost two years.
This is the one-year loan prime rate (LPR) which has been set at 3.7% against 3.8%. This further decline should reduce borrowing costs in the market. For its part, the five-year LPR was also reduced to 4.60%, against 4.65% a month earlier.
The country announced this week that it had recorded economic growth of 8.1% to reach 114.370 billion yuan (about 18.000 billion dollars) in 2021, its highest level since 2012 (7.8%). The Chinese economy had thus continued its stable recovery begun in 2020 (2.3%).
However, the central bank warned of the triple pressure of contracting demand, strains on supply chains and lowered targets in an increasingly “complicated” external environment.