Economics

China Rejoins Monetary Easing Wave as World Shuts Down

PBOC adviser says cut signals start of stronger easing stage
Economists forecast further interest rate reductions

A Chinese flag flies in front of the People's Bank of China headquarters in Beijing, China, on Monday, Jan. 7, 2019. The central bank on Friday announced another cut to the amount of cash lenders must hold as reserves in a move to release a net 800 billion yuan ($117 billion) of liquidity and offset a funding squeeze ahead of the Chinese New Year.Photographer: Giulia Marchi/Bloomberg

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By Bloomberg News

March 30, 2020 at 1:50 AM UTC

Updated on

March 30, 2020 at 4:21 AM UTC

This article is for subscribers only.

China’s central bank cut the interest rate it charges on loans to banks by the biggest amount since 2015 as authorities ramp up their response to the worsening economic impact from the coronavirus pandemic.

The People’s Bank of China reduced the interest rate on 7-day reverse repurchase agreements to 2.2% from 2.4% when it injected 50 billion yuan ($7.1 billion) into the banking system, according to a statement Monday. The central bank said this will keep liquidity sufficient to help the real economy.