China Cuts Benchmark Lending Rates to Stimulate Economy.

China has lowered its main benchmark lending rates by 25 basis points in an effort to boost economic growth. The one-year loan prime rate (LPR) has been reduced to 3.1%, while the five-year LPR has been cut to 3.6%. This move was anticipated following comments from China's central bank governor, Pan Gongsheng, who had indicated the likelihood of such cuts.

In addition to the LPR cuts, Pan suggested that further reductions in the reserve requirement ratio (RRR) for banks could be implemented by year-end. He also mentioned plans to lower the seven-day reverse repurchase rate and the medium-term lending facility rate.

While these monetary stimulus measures are significant, experts argue that they may not be sufficient to address China's economic challenges. Shane Oliver from AMP emphasizes the need for fiscal stimulus to tackle the lack of demand in the country. Zhiwei Zhang of Pinpoint Asset Management expects more rate cuts in the future, particularly as the U.S. Federal Reserve rates decline.

These latest cuts follow a series of support measures implemented by China's central bank to shore up the economy, which has been grappling with a prolonged property crisis and weak consumer sentiment. Despite these challenges, China reported better-than-expected third-quarter GDP growth and improved retail sales and industrial production figures for September, offering some hope for economic recovery.

Report by CNBC