China’s central bank cut interest rates for the sixth time in less than a year and it again lowered the amount of cash that banks must hold as reserves in a bid to jump start growth in its stuttering economy.
Monetary policy easing in the world’s second-largest economy is at its most aggressive since the 2008/09 financial crisis, as growth looks set to slip to a 25-year-low this year of under 7 per cent.
“We’ve got half the world’s central banks in easing mode,” said Joe Rundle, the head of trading at ETX Capital in London. “And we’ll probably see more easing from China to come.”
The PBOC said on its website that it was lowering the one-year benchmark bank lending rate by 25 basis points to 4.35 per cent, effective from October 24. The one-year benchmark deposit rate was lowered by 25 basis points to 1.50 per cent.
The late-evening moves come just ahead of a high-level meeting in Beijing starting on Monday where senior Chinese leaders will thrash out the country’s economic blue-print for the next five years.