China aims for stronger economy with rates adjustment

0 258

China says it has conducted some policy rate adjustments as part of efforts to shore up economic recovery, the Chinese News Agency reports.

The People’s Bank of China (PBOC), the country’s central bank, cut the interest rate of the one-year medium-term lending facility (MLF) from 2.65 percent to 2.5 percent, injecting 401 billion yuan (about 55.64 billion U.S. dollars) into the market.

At the same time, the PBOC conducted seven-day reverse repos worth 204 billion yuan at an interest rate of 1.8 percent, down from 1.9 percent.

Also, it lowered the overnight, seven-day and one-month interest rates on its standing lending facility all by 10 basis points to 2.65 percent, 2.8 percent and 3.15 percent, respectively.

The interest rate lowering is to reduce the financing cost for the real economy, and prevent funds from simply circulating in the monetary market for the sake of arbitrage, according to analysts.

China’s yuan-denominated loans rose by 345.9 billion yuan in July, decreasing by 349.8 billion yuan from the same period last year, and industry insiders believe that it reflects that the foundation for economic recovery needs to further consolidate besides seasonal factors.

Looking ahead, experts say that China still possesses room to step up counter-cyclical adjustment with monetary policies.






Xinhua/Hauwa Abu

Leave A Reply

Your email address will not be published.