The central bank of China, one of the world’s largest economies, has decided to lower the policy rate. Lowering the short-term repo rate from 2.0 to 1.9 central bank of china, lowered interest rates for the first time in 10 months. While the move made by the Asian giant surprised most investors, eyes FEDAnd European Central BankHe returned to the ECB.
The majority of market experts pointed to macroeconomic data as the reason for the rate cut. The Chinese economy, which went through a troubled pandemic process due to its dense population, did not realize the expected recovery. Experts highlighted the possibility that the Jinping government will make new moves in the coming days.
Will Interest Rate Cuts Work?
The People’s Bank of China injected 2 billion yuan into the market alongside the interest rate decision to stimulate the economy. However, economists do not hesitate to comment on how effective these moves will be. Experts think that the borrowing appetite of individuals and companies will remain low due to low growth expectations.
Citibank, in a note to its customers today, emphasized that the People’s Bank of China stopped waiting and left the button. Last week, the largest commercial banks in the country decided to cut interest rates.
MB Chairman Yi Gang announced that they will support the economy by not compromising the 5% annual growth target.
