SHANGHAISINGAPORE, June 20 Reuters China cut its key lending benchmarks on Tuesday, the first such reductions in 10 months as authorities seek to shore up a slowing economic recovery, although concerns about the property market meant the easing was not as large as expected.

The latest monetary loosening comes as a postpandemic recovery in the world39;s secondlargest economy shows signs of losing the initial momentum seen in the first quarter.

The oneyear loan prime rate LPR was lowered by 10 basis points to 3.55, while the fiveyear LPR was cut by the same margin to 4.20.

While all 32 participants in a Reuters poll had expected reductions to both rates, the cut to the fiveyear rate was smaller than many expected.

These cuts will lower the cost of new loans, as well as interest payments on existing loans, said Julian EvansPritchard, head of China economics at Capital Economics.

That should offer some modest support to economic activity. But we think it is unlikely to drive a sharp acceleration in credit growth, given weak credit demand.

The smallerthan expected cut disappointed investors with the Hang Seng Mainland Properties Index dropping 3.61, outpacing a fall in the benchmark Hang Seng Index. The Chinese currency lost as much as 0.25 and broader Asian stocks markets also dipped.

The People39;s Bank of China PBOC lowered short and mediumterm policy rates last week.

The mediumterm lending facility MLF rate serves as a guide to the LPR and markets mostly see the…