Record rate cut in China

In China, where economic indicators deteriorated due to Kovid measures, a record reduction in benchmark loan interest came.

The 5-year loan main interest rate, which is also an indicator for mortgage rates, was reduced by 15 basis points to 4.45 percent. Economists surveyed by Bloomberg had expected a 5-10 basis point cut.

The 1-year loan main interest rate was kept at 3.7 percent. In the Bloomberg survey, there was an expectation of a 5-10 basis point cut in this interest rate.

The record cut decision came after the mortgage interest rate cut. On Sunday, the People's Bank of China (PBOC) reduced the mortgage interest rates for first-time home buyers from 4.6 percent to 4.4 percent in order to prevent the contraction in the housing market.

There were downward revisions on Chinese growth.

While the epidemic measures in China showed their effect on the economy, foreign institutions also revised their expectations downwards.

One of the last institutions to change their expectations was Goldman Sachs of the USA. The bank cut its 2022 growth forecast for China from 4.5 percent to 4 percent. The annual growth forecast for the second quarter was also reduced from 4 percent to 1.5 percent.

Institutional economists referred to the government's growth target of around 5.5 percent and said, "Economic performance has decreased markedly in regions that have been shaken by the increase in cases."

Other US banks also lowered their growth expectations. Citi cut its 2022 growth forecast from 5.1 percent to 4.2 percent, JPMorgan from 4.6 percent to 4.3 percent, and Morgan Stanley from 4.6 percent to 4.2 percent.