China’s largest bank has reduced lending rates but the benchmark has reduced its apparent low interest rate with Reuters

BEIJING (Reuters) – China’s largest bank will cut prices on its mortgage platform by 25 bases (bps) to cater to the rural and small business sector, starting on Dec. 7, the Securities Times reported Tuesday, citing sources.

But discounted mortgages will remain relatively low in the near future, experts say.

The three-month lease will be reduced to 1.7%, while the six-month lease will be reduced to 1.9% and the one-year lease will be reduced to 2%, the newspaper said.

A bank source has confirmed that the price has been cut in Reuters.

“Today’s debt comes from a new interest rate. The cut-off rate should be related to the RRR reduction, and it is a way to help the real economy,” a source told Reuters.

In July 2020, the central bank again cut a rebate and reimbursed prices by 25 bases of small and rural enterprises.

Investors are scrutinizing whether the central bank will cut its mortgage rates (LPR) in the coming months, saying Monday that it will cut the amount banks need from the Dec. 15.

The world’s second-largest economy is facing several hurricanes by 2022, due to a shortage of supplies and strong COVID-19 measures that have hampered its use.

“We believe that Beijing needs to improve its spending cuts, including relocating to 2022 to prevent further collapse,” said Ting Lu, a Chinese economist in Nomura.

“We can also see 50 bp RRR cut in H1 2022, but we still see the potential for price reduction as small, due to rising PPI prices and rising CPI prices.”