Cen­tral bank low­ers de­posit, lend­ing rates

China Daily (Canada) - - NEWS CAPSULE -

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.

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