China’s central bank cuts rates to revive property sector and boost economy

China’s central bank has cut both its five-year loan prime rate and its one-year rate, moving to revive its ailing property sector and rev up the slowing economy.

The five-year rate, which is a benchmark for mortgages, was cut by 10 basis points to 3.85% from 3.95%. The one-year rate was reduced to 3.35% from 3.45%.

The People’s Bank of China also reduced collateral requirements for its medium-term lending facility for banks. It said that was intended to ease pressure on the bond market.

The world’s second largest economy has struggled to regain momentum since the COVID-19 pandemic and a slump in the property market has been a major hindrance.

Economic growth fell to 4.7% in the last quarter, but remained at the government’s target rate of about 5% for the first half of the year.