SHANGHAI, Aug 22 Reuters China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin on Monday, adding to last week39;s easing measures, as Beijing boosts efforts to revive an economy hobbled by a property crisis and a resurgence of COVID19 cases.

The People39;s Bank of China PBOC is walking a tightrope in its efforts to revive growth. Offering too much of stimulus could add to inflation pressures and risk capital flight as the Federal Reserve and other economies raise interest rates aggressively.

However, weak credit demand is forcing the PBOC39;s hand as it tries to keep China39;s economy on an even keel.

The oneyear loan prime rate LPR was lowered by 5 basis points bps to 3.65 at the central bank39;s monthly fixing on Monday, while the fiveyear LPR was slashed by 15 bps to 4.30.

The oneyear LPR was last reduced in January. The fiveyear tenor, which was last lowered in May, influences the pricing of home mortgages.

All told, the impression we get from all the PBOC39;s recent announcements is that policy is being eased but not dramatically, said Sheana Yue, China economist at Capital Economics.

We anticipate two more 10 bps cuts to the PBOC policy rates over the remainder of this year and continue to forecast a reserve requirement ratio RRR cut next quarter.

The LPR cuts come after the PBOC surprised markets last week by lowering the medium term lending facility MLF rate and another shortterm liquidity tool, as a string of recent…