World Economy

China to Cut Rates Further

China to Cut Rates FurtherChina to Cut Rates Further

China will cut interest rates this year by the most since the global financial crisis as policy makers prioritize growth amid signs of a further economic slowdown, Bloomberg reported. The People’s Bank of China will reduce the one-year lending rate by another 25 basis points to a record 4.85 percent by year-end, bringing the cumulative cuts in 2015 to 75 basis points. The amount of cash major banks must set aside as reserves will be lowered by 1 percentage point to 17.5 percent, the least since 2010, the Bloomberg survey shows. China has stepped up stimulus this quarter in Asia’s largest economy as disappointing exports and manufacturing threaten the 7 percent annual growth objective. With inflation at half the official target, real interest rates when adjusted for the drop in producer prices have hovered near the highest since 2009, even as the central bank continued to slash borrowing costs and reserve requirements.