China's central bank has cut its mortgage rate as officials work to support the crisis-hit property market.
The five-year loan prime rate (LPR) was decreased by the People's Bank of China (PBOC) by 1.5 percentage points, which is equal to the largest decrease on record.
The second-largest economy in the world is dealing with a real estate crisis that has caused some construction projects to stall.
Lockdowns brought on by the nation's rigorous zero-Covid regulations are also having an impact on businesses and customers.1
The PBOC lowered the five-year rate to 4.2% on Monday, which will lower the cost of mortgage payments across the nation.
The prime rate for one-year loans, which is typically used to assess corporate lending, was also decreased from 3.7% to 3.65%.
The actions are a part of a larger initiative to support the real estate market, according to Iris Pang, Greater China Chief Economist at ING Bank.
She said in a message on Monday that "concurrently, some local governments have started to lend to property developers to continue the construction of uncompleted dwellings."
"The two steps taken together should allay existing home mortgage borrowers' fears," she continued.
According to estimates, China's property crisis reduced the sector's worth by more than a trillion dollars in 2017.
According to official figures, home sales in China have declined for 11 straight months. Since China established a private property market in the late 1990s, that is the longest recession.
Several Chinese developers have put a stop to construction on houses that have already been sold due to financial worries.
It is also known that hundreds of homebuyers have threatened to cease making their mortgage payments unless the work picks back up.
The Chinese government has hinted that its goal of 5.5% annual economic growth may not be met.
After its quarterly economic conference in July, the Politburo, the ruling Communist Party's top policy-making body, made no mention of the official growth objective. Leaders would merely "strive to obtain the best results possible," it stated.
Chinese Premier Li Keqiang announced last week that the government would take additional measures to increase investment and consumption in the nation.
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