China central bank unexpectedly cuts rates

Shanghai Aug. 15 (BNA): China’s central bank unexpectedly cut key policy rates for the second time in three months on Tuesday, in a fresh sign that the authorities are ramping up monetary easing efforts to boost a sputtering economic recovery.

Reuters quoted the People’s Bank of China (PBOC) as saying that it lowered the rate on 401 billion yuan ($55.25 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 15 basis points to 2.50% from 2.65% previously.

The cash injection was to counteract factors including tax payments in order to “keep banking system liquidity reasonably ample”, the PBOC said in an online statement.

The central bank also injected 204 billion yuan through seven-day reverse repos while cutting borrowing costs by 10 basis points to 1.80% from 1.90% previously, it said in an online statement.

 

WHQ