Central Banks
China Surprises With Rate Cut After Xi’s Big Meeting Disappoints
- Policy move highlights urgency of officials to support growth
- Economists emphasize need for fiscal stimulus after modest cut
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China increased support for the economy with surprise interest-rate cuts, seeking to prop up growth after a lack of short-term stimulus from a major Communist Party meeting disappointed investors.
The People’s Bank of China on Monday cut the seven-day reverse repo rate, a key short-term policy rate, in the first reduction in almost a year. Chinese banks followed the move about an hour later by lowering their main benchmark lending rates, making it less costly to borrow for mortgages and other loans.