Central bank lowers deposit, lending rates
China’s central bank lowered the benchmark deposit and lending rates by 25 basis points beginning, hoping to further ease companies’ debt burdens and curb expanding downward risks.
After the adjustment that started on Wednesday, the oneyear deposit rate for financial institutions fell to 1.75 percent, and the lending rate dropped to a record low of 4.6 percent, according to the People’s Bank of China.
It was the fifth drop in interest rates since November. The last one, also by 25 basis points, was on June 28.
The central bank also cut the amount of money banks must hold, or the reserve requirement ratio, by 50 basis points for all financial institutions, starting on Wednesday, to ensure sufficient liquidity in the banking sector and keep a stable growth in credit. The measure is to offset capital outflows, which have increased since the third quarter, according to economists.