PBC

 
The People's Bank of China (PBC), the country's central bank, said on Monday that it has basically completed the reduction of housing loan interest rates, benefiting more than 50 million households and 150 million people, and reducing borrowers' interest expenses by 3,200 yuan ($440.3) a year on average per household.

In August, China's top financial regulators including the PBC and the National Administration of Financial Regulation issued a notice about lower down payments for both first- and second-time homebuyers, while further cutting interest rates on existing mortgages, aiming to better meet housing demand and promote the healthy and steady development of the real estate market.

Later, China's four largest lenders - Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China - issued separate statements on mortgage rate reductions, which took effect on September 25, with banks and borrowers encouraged to negotiate a rate change or arrange refinancing of existing mortgages.

According to the PBC, the country's market-based interest rate reforms are among the core elements of supply-side structural reform in the financial sector. The PBC will further improve the mechanism for the formation, regulation and transmission of market-oriented interest rates, unblocking the channels through which capital enters the real economy, and promoting optimization of the allocation of financial resources.

In addition, it will continuously enhance the marketization of mortgage interest rates to better support rigid housing demand and the needs of those who wish to improve their housing conditions.

Last week, China held the tone-setting central financial work conference. It was stressed at the meeting that the financial sector is the lifeblood of a nation's economy and a crucial component of a country's core competitiveness. It is imperative to accelerate the building of a nation with a strong financial sector, comprehensively strengthen financial regulation, improve the financial system, optimize financial services, and effectively forestall and defuse financial risks.