China's Central Bank Cuts Key Rates by 10 Basis Points to 1.70%, 3.35%, and 3.85% to Support Economy

Jul 22, 2024, 01:38 AM

China's central bank, the People's Bank of China (PBOC), announced a series of rate cuts on Monday to bolster the economy. The PBOC lowered the interest rate on seven-day reverse repurchase agreements from 1.8% to 1.7%, marking the first such reduction since August 2023. Additionally, the one-year loan prime rate (LPR) was reduced by 10 basis points to 3.35%, below the expected 3.45%, and the five-year LPR was similarly cut to 3.85%, below the expected 3.95%. These measures are part of a broader effort to strengthen counter-cyclical adjustments and support the real economy. The PBOC also injected 58.2 billion yuan through seven-day reverse repos. The rate cuts came as a surprise to the market, indicating the central bank's commitment to stimulating growth in the world's second-largest economy.