China is considering cutting interest rates on as much as US$5.3 trillion (HK$41.3 trillion) of mortgages in two steps to lower borrowing costs for millions of families while mitigating the profit squeeze on its banking system.
The first cut may come in the next few weeks while the second move would take effect at the beginning of next year, said the people.
In China, regulators set benchmarks for mortgage rates that are followed closely by banks. The National Financial Regulatory Administration didn't respond to a request for comment.
Bloomberg reported last week authorities are mulling a plan to allow homeowners to renegotiate terms with their current lenders before January when banks typically reprice mortgages. They would also be allowed to refinance with a different bank for the first time since the global financial crisis, people familiar with the matter said.This came as the Guangzhou-based developer R&F Properties (2777) said receivers have been appointed for some assets of its certain subsidiaries following winding-up petitions against them.
The involved assets include 68 hotels and one office building in mainland China.In other news, China's service activity expansion slowed last month amid rising costs and heightened market competition, a private-sector survey showed yesterday.
The Caixin/S&P Global services purchasing managers' index slipped to 51.6 in August from 52.1 in July, missing forecasts. The 50-mark separates expansion from contraction on a monthly basis.Meanwhile, analysts at Bank of America lowered the forecast of China's full-year economic growth from 5 percent to 4.8 percent, adding to a string of recent forecast cuts by investment banks.
