China’s Central Bank Cuts Loan Prime Rates
China’s central bank cut key interest rates on Tuesday for loans issued by the state-controlled banking system, in the clearest sign yet of mounting concern in the Chinese government and corporate sector that the country’s economy is stalling.
The interest rate cut was small — a tenth of a percentage point for the country’s benchmark one-year and five-year interest rates for loans. But because almost all of the country’s corporate lending and mortgages are linked to the two rates, the reductions could have some effect on the overall pace of economic growth.
The move by the central bank, the People’s Bank of China, puts China at odds with policies in the West. The Federal Reserve spent over a year battling inflation by raising rates before pausing earlier this month. The European Central Bank has also been pushing up interest rates in response to inflation.
Source: The New York Times
