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China's central bank tells commercial lenders to start cutting rates on existing mortgages

BY Reuters | ECONOMIC | 09/29/24 10:02 AM EDT

BEIJING, Sept 29 (Reuters) - The People's Bank of China (PBOC) on Sunday told commercial banks to start lowering interest rates on all existing housing loans, in a sweeping move to help lighten the mortgage burden on households hit by a slowing economy.

All commercial banks must, in batches, reduce interest rates on existing mortgages by Oct. 31 to no less than 30 basis points below the PBOC's Loan Prime Rate (LPR), the central bank's benchmark rate for mortgages, according to a statement released by the PBOC. (Reporting by Ryan Woo and Ellen Zhang; Editing by Kirsten Donovan)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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