China Cuts Policy Interest Rate for First Time Since April 2020
- PBOC net injected 200 billion yuan of medium-term loans
- Overnight funding costs are still close to three-month high
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China lowered a key interest rate for the first time since the peak of the pandemic in 2020 as a property-market slump and repeated virus outbreaks dampened the nation’s growth outlook. Bonds rallied.
The People’s Bank of China cut the rate on its one-year policy loans by 10 basis points to 2.85%, the first reduction since April 2020. It also cut the rate on the seven-day reverse repurchase rate and net injected 200 billion yuan ($31.5 billion) of medium-term cash into the financial system.