China's central bank cut rates this morning, for the first time in more than two years, in an effort to boost a cooling economy, which is on course for its weakest growth in 24 years.
The People's Bank of China (Pboc) in fact reduced the benchmark rate on one-year loans by 40 basis points, to 5,6%. The one-year deposit rate was also cut by 25 basis points, and the new rates will take effect starting tomorrow.
The Pboc has also taken a further step towards the liberalization of rates, announcing that the rates on deposits applied by banks can be established within the maximum ceiling of 1,2 times the level of the benchmark, compared to the previous ceiling of 1,1.
