BEIJING: Central bank of China has taken steps to speed the slowing economy which included cutting interest rates for the sixth time since November on Friday and lowering the amount of cash that banks must hold as reserves in another attempt to jumpstart a slowing economy.
China’s monetary policy easing is at its most aggressive since the 2008/09 global financial crisis, underscoring concerns within Beijing about the health of the world’s second-largest economy.
The People’s Bank of China (PBOC) said on its website that it was lowering the one-year benchmark bank lending rate by 25 basis points to 4.35 percent, effective from Oct 24.
‘The People’s Bank has delivered another jolt of stimulus,’ analysts at Capital Economics said in a note to clients, but added that they were still waiting for clear evidence of an economic turnaround.
‘We are retaining our forecast that benchmark rates and the reserve requirement ratio will both be cut once more before the end of the year, with a further move in both early in 2016.’
Sobering economic data in the third quarter has demonstrated the daunting challenges faced by the country’s leaders, not least in attaining the 7 percent growth target set by the government.
Data released on Monday showed China’s economy grew 6.9 percent between July and September from a year earlier, dipping below 7 percent for the first time since the global financial crisis.
The one-year benchmark deposit rate was lowered by 25 basis points to 1.50 percent.
The RRR will also be cut by 50 basis points for all banks, taking the ratio to 17.5 percent for the country’s biggest lenders, the PBOC said in a statement.
Buoyed by China’s easing, which came late in the evening in Asia, European shares turned higher and the Chinese offshore yuan CNH= fell against the US dollar.
