China cuts key policy interest rate for first time since January as major economic growth indicators slow

Another major policy rate, the seven-day reverse repo, was also lowered to 2.0 per cent from 2.1 per cent

The rate cuts, which will help boost economic activities, came as July data released by the National Bureau of Statistics on Monday indicates worrying trends

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China’s central bank lowered the rate of one-year medium-term lending facilities to 2.75 per cent from 2.85 per cent on Monday. Photo: Bloomberg

Published: 10:54am, 15 Aug 2022Updated: 1:53pm, 15 Aug 2022

China has cut a key policy interest rate by 10 basis points – the first cut since mid-January – as its economy is still under pressure from coronavirus outbreaks, and as tensions with the United States remain elevated amid a series of high-profile Taiwan visits this month.

The People’s Bank of China (PBOC) unexpectedly lowered the rate of one-year medium-term lending facilities to 2.75 per cent from 2.85 per cent when selling 400 billion yuan (US$59.3 billion) of the tool on Monday morning.

The move is set to fully meet the needs of financial institutions, the central bank said in its online statement.

Another major policy rate, the seven-day reverse repo, was also lowered to 2.0 per cent from 2.1 per cent.

The rate cuts, which will help boost economic activities, came as July data released by the National Bureau of Statistics on Monday indicated worrying trends, including still weak consumption.

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