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China cuts key loan rate for first time since April 2020

Asian stocks drop as PBOC underscores worsening economic outlook

The PBOC lowered the one-year LPR by 5 basis points to 3.8%.   © Reuters

SHANGHAI -- China's central bank on Monday cut its benchmark lending rate for the first time in 20 months, responding to a slowing economy.

The People's Bank of China reduced the one-year loan prime rate, or LPR, to 3.8%, down from 3.85%, at its December meeting. The cut, which sent Asian stock markets reeling, came after the PBOC decreased the reserve requirement ratio imposed on commercial banks by 0.5% earlier this month, the second reduction this year.

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