BEIJING: China’s top banks will lower interest rates on existing mortgages from October 25, state media said Saturday, after Beijing’s central bank requested the adjustment to reduce pressure on homeowners.
The move comes as Finance Minister Lan Fo’an is expected to announce further fiscal stimulus at a highly anticipated press conference in Beijing on Saturday.
Chinese policymakers have unveiled a string of stimulus measures in recent weeks aimed at boosting an economy blighted by a years-long property sector crisis and chronically low consumption.
The measures have included a suite of rate cuts and a loosening of rules on buying homes, but economists have said that more action is needed to pull the economy out of its slump for good.
“Except for second mortgages in Beijing, Shanghai, Shenzhen and some other regions, the interest rates on other eligible mortgages will be adjusted” to no less than 30 basis points below the prime lending rate, the central bank’s benchmark rate for mortgages, state broadcaster CCTV said.
CCTV reported that major banks including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank had announced that they would make the adjustments “in batches”.
The banks said the tweaks “will be uniformly done… and customers do not need to apply for them”, CCTV reported.
The People’s Bank of China last month requested that commercial banks lower such rates by October 31.
Beijing has said Lan will use Saturday’s briefing to outline “countercyclical adjustment of fiscal policy to promote high-quality economic development”.
Further details are scarce, but analysts and investors polled by Bloomberg said they expected two trillion yuan ($283 billion) in stimulus to be announced, which would be Beijing’s biggest support programme since the bazooka during the global financial crisis.
Gary Ng, senior economist for Asia Pacific at Natixis, told AFP he thought Beijing would unveil “two to three trillion yuan of ultra-long government bond issuance”.
“Any amount smaller than this will cause disappointment in the market again,” he stressed, referring to a slump in stock prices this week following a briefing Tuesday that failed to announce any new measures.
Measures would likely be directed at “real estate, consumption and infrastructure”, Ng said.
Source Homevior.in
