(Bloomberg) -- Chinese banks made a smaller-than-expected cut to their benchmark lending rate on Monday and avoided trimming the reference rate for mortgages, despite the central bank putting pressure on lenders to boost loans. Most Read from BloombergBorrowers With $39 Billion in Student Loans Finally See ReliefPutin Turns to Ruble and Ballot to Shore Up Shaken AuthorityRolls-Royce Debuts Droptail Roadster, Priced at Over $30 MillionChina Urges More Loans, Debt Risk Reduction as Woes CompoundAl
The one-year loan prime rate was lowered by 10 basis points to 3.45% from 3.55%, a slighter reduction than what most economists surveyed by Bloomberg had expected. The five-year rate, a reference for mortgages, was unexpectedly kept steady at 4.2%, according to data from the People’s Bank of China. Most economists had predicted a 15 basis-point cut.
Stocks in China and Hong Kong declined at the market open on Monday. The MSCI China Index slid as much as 1.1% to its lowest since June 1. The offshore yuan extended a modest decline against the dollar, weakening about 0.2%. China 10-year bond yields fell one basis point to 2.55%. “There has been speculation on whether the government will completely let loose property policies after the Politburo meeting omitted the pledge that housing is not for speculation,” he said, referring to a meeting held last month by the Communist Party’s top decision-making body. The absence of that slogan, a signature of President Xi Jinping, fueled speculation that some tough restrictions on property would be reversed.
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