The PBOC reduced the one-year loan prime rate to 3.45% and the five-year LPR to 4.20%, indicating China’s limited monetary policy flexibility.

The drop comes amid a faltering post-COVID economic recovery and falling oil imports.

The stagnant mortgage rate raises concerns about China’s real estate crisis, with many developers facing debt defaults.

Investors seek targeted support, but analysts believe this is unlikely as China aims to reduce its dependence on real estate.