China unveils rate cut, mortgage subsidies to spur growth
FXI•China cut the rate on its one-year pledged supplementary lending facility to 1.5% from 1.75% and announced a 1-percentage-point annual interest subsidy for eligible first-home mortgages, capped at 1 million yuan per household for up to five years.
1. Central bank measures
The People’s Bank of China cut the rate on its pledged supplementary lending facility by 25 basis points and broadened the facility to support investment in infrastructure networks. It also raised relending quotas for science and technology innovation and upgrades by 200 billion yuan to 1.4 trillion yuan, for farms and small businesses by 500 billion yuan to 4.85 trillion yuan, and for private enterprises by 300 billion yuan to 1.3 trillion yuan.
2. Mortgage subsidies
From October 1, eligible first-time homebuyers nationwide will receive an annual interest subsidy of 1 percentage point on new commercial mortgages for up to five years. The subsidized loan portion is capped at 1 million yuan per household; eligible homes must be no larger than 120 square metres and cost no more than 1.5 million yuan.
