Economics
China Cuts Interest Rates as Policy Divergence With U.S. Widens
- PBOC lowers benchmark lending rate to record-low 4.35%
- Deposit cap scrapped in further step toward liberalization
Inside China's Interest Rates Cuts
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China stepped up monetary easing with its sixth interest-rate cut in a year to combat deflationary pressures and a slowing economy, moving ahead of anticipated fresh stimulus by central banks from Europe to Japan and possible tightening in the U.S.
The one-year lending rate will be cut to 4.35 percent from 4.6 percent effective Saturday the People’s Bank of China said on its website on Friday, while the one-year deposit rate will fall to 1.5 percent from 1.75 percent. Reserve requirements for all banks were lowered by 50 basis points, with an extra 50 basis point reduction for some institutions.