Daily Management Review

China lowers key rate to support economy under "triple pressure"


The People's Bank of China lowered its key rate by 10 basis points. It did so shortly before the publication of the country's GDP data.

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public domain pictures
China's central bank cut its key interest rate for the first time since April 2020. The decision was announced almost simultaneously with the publication of data from China's State Statistics Committee, which shows that economic growth slowed in the last quarter compared to the previous three months, reports Bloomberg. 

The economy is losing momentum amid new outbreaks of the disease due to the Omicron strain of the coronavirus. 

The interest rate cut by the People's Bank of China exceeded market expectations: the one-year medium-term lending rate was cut to 2.85% from 2.95% and the seven-day repurchase rate (seven-day repo) was reduced to 2.1% from 2.2%. 

The key rate cut of 10 basis points was announced shortly before the publication of China's GDP data. This data showed that GDP grew by 4% in the latest quarter, higher than economists' forecast of 3.3%, but lower than in the previous quarter.

source: bloomberg.com