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China cuts lending rate to help coronavirus-hit economy

Central bank's first reduction in 3 months aims to support small companies

China's central bank aims to support small and medium-sized companies affected by the coronavirus with its rate cut.

BEIJING -- The People's Bank of China lowered the benchmark lending rate for February, the central bank announced Thursday, in a sign to support small and mid-sized enterprises which are severely hit by the outbreak of the new coronavirus.

The one-year loan prime rate (LPR) was cut by 0.1% to 4.05% from the previous monthly fixing. The LPR is a lending reference rate set monthly by 18 banks at which they lend to customers with good credit. It was first announced in August 2019, as a means to substitute the bank's base rate used for policy interest rate. The bank announces the LPR on the 20th of every month.

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