In the coming weeks, interest rates on housing loans in China - for both first and second homes - could be cut.

According to BloombergCiting sources familiar with the process, the 80 basis point rate cut was proposed by the country's financial regulators and will be divided into two phases, with the second to take place at the beginning of next year.

A total of 5.3 billion dollars in loans should be covered. The aim is to ease the credit pressure on families. The plan is still being finalized and will have to be approved by senior government bodies, according to the sources, who did not wish to be identified.

Financial regulators are thus trying to help the wounded real estate market and the economy, while safeguarding the country's financial system, valued at 66 billion dollars.

The balance is not easy. Lowering interest rates too much increases the pressure on banks, which already saw a record reduction in their profit margins at the end of June, to 1.54% - below the 1.8% considered advisable.

Last week, the Bloomberg reported that the Chinese authorities are considering allowing home loans to be renegotiated until January.

(Photo DR)