SHANGHAI: China cut benchmark lending rates at a monthly fixing on Monday, after the central bank surprised the markets by lowering a key short-term policy rate earlier in the session.
The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.35 per cent from 3.45 per cent previously, while the five-year LPR was reduced by the same margin to 3.85 per cent from 3.95 per cent.
In a Reuters survey of 36 market participants conducted last week, 23, or 64 per cent of all respondents, expected both rates to stay unchanged.
Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.