China central bank cuts rates for second time in three months to support economy
Last updated on: 15 August,2023 11:32 am
The People’s Bank of China (PBOC) said it lowered the rate on 401 billion yuan ($55.25 billion)
SHANGHAI/SINGAPORE (Reuters) -China’s central bank unexpectedly cut key policy rates for the second time in three months on Tuesday, in a fresh sign that the authorities are ramping up monetary easing efforts to boost a sputtering economic recovery.
The People’s Bank of China (PBOC) said it lowered the rate on 401 billion yuan ($55.25 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 15 basis points to 2.50% from 2.65% previously.
In a Reuters poll of 26 market watchers conducted this week, 20 participants, or 77%, predicted that the central bank would leave the MLF rate unchanged. Only six respondents forecast a marginal rate reduction.
The central bank also injected 204 billion yuan through seven-day reverse repos while cutting borrowing costs by 10 basis points to 1.80% from 1.90% previously, it said in an online statement.
The PBOC lowered key policy rates in June to prop up the broad economy, but data has been increasingly weak since.