China Cuts Benchmark Interest Rate By 25bps, Cuts RRR By 50bps
What China was supposed to do over the weekend, and waited until its stock market tumbled another 16%, it has just done, because as MarketNews, Reuters and Bloomberg all just blasted, moments ago the PBOC cut both the benchmark and RRR rates:
- CHINA PBOC CUTS INTEREST RATES
- CHINA PBOC CUTS REQUIRED DEPOSIT RESERVE RATIO
- CHINA PBOC CUTS 1Y DEPOSIT RATE BY 25 BPS
- CHINA PBOC CUTS 1Y LENDING RATE BY 25 BPS
- CHINA PBOC CUTS BANKS DEPOSIT RESERVE RATIO BY 50 BPS
- CHINA PBOC: OVERALL PRICE LEVEL STILL LOW DESPITE PORK PRICE
- CHINA PBOC: GLOBAL FINANCIAL MKT SEES BIG VOLATILITY
- CHINA PBOC: ECO STILL FACING DOWNWARD PRESSURE
- CHINA PBOC LIFTS CEILING ON DEPOSIT INTEREST RATES
This move takes the RRR from 18.50% to 18.00%, the deposit rate from 2.00% to 1.75%, the lending rate from 4.85% to 4.60%, and the PBOC also announced a further 300 bps RRR cut for financial leasing and auto leasing companies.
Here is the initial take from MarketNews:
The People’s Bank of China cut both interest rates and the bank deposit reserve requirement on Tuesday, saying that a more flexible monetary policy is needed in the face of pressure on the economy and global financial market volatility.The PBOC announced 25 basis point cuts to the one-year deposit and lending rate and also cut the required bank deposit reserve ratio by 50 basis points, with the latter to take effect on September 6. The reserve cut will release around CNY650 billion in frozen deposits back into the system.
The PBOC also lifted entirely the ceiling on deposit rates of over one-year, marking another step towards fully-liberalized interest rates.
This is what the PBOC said in connection to the rate cut (google translated):
1. what the introduction of the combination of measures to cut interest rates drop quasi major consideration is?
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