USD/CNH remains near the middle of its multi-month range as China keeps key loan rates and the 7-day reverse repo rate unchanged. Authorities are reportedly considering offering mortgage subsidies and tax incentives to support the struggling housing market, although previous measures have had limited impact, BBH FX analysts said.
China keeps key loan interest rates unchanged for the sixth month
“USD/CNY is trading near the middle of a multi-month range between 7.0850 and 7.1500. Chinese commercial banks left their key 1- and 5-year loan rates unchanged for the sixth month at 3.00% and 3.50% respectively. This was expected given that the People’s Bank of China kept the relevant 7-day reverse repo rate at 1.40% since its 10 basis point cut. May.”
Meanwhile, according to Bloomberg News, China is considering new measures to support the faltering real estate market. These measures include providing mortgage subsidies to new homebuyers across the country, increasing income tax rebates for mortgage borrowers, and reducing real estate transaction costs.
“However, previous support measures have done little to lift a housing market burdened by oversupply.”
