Chinese Markets Decline After PBoC Lowers Benchmark Rate

Asian stocks fell broadly on Monday as Joe Biden announced his withdrawal from the 2024 presidential race against Donald Trump and China's central bank lowered its one-year benchmark loan prime rate to bolster a slowing economy.

China's Shanghai Composite index dropped 0.61 percent to 2,964.22, getting little lift from the surprise 10-bps cut in short-term rates by the country's central bank.

China lowered its short-term policy rate as well as benchmark lending rates on Monday, in order to prop up growth.

The People's Bank of China cut the interest rate on seven-day reverse repos to 1.7 percent from 1.8 percent.

The action was aimed to strengthen counter-cyclical adjustments to better support the real economy, the central bank said.

On Monday, the PBoC conducted CNY 58.2 billion of seven-day reverse repos. The operation will help to keep reasonable and ample liquidity in the banking system, the bank added.

After cutting seven-day reverse repo rate, the central bank lowered the one-year loan prime rate to 3.35 percent from 3.45 percent.

Similarly, the five-year LPR, the benchmark for mortgage rates, was trimmed to 3.85 percent from 3.95 percent. The five-year LPR was last lowered by 5 basis points in February.

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