China Unexpectedly Cuts One-Year Policy Rate by Most Since 2020
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 25 2024
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Source: Bloomberg
Rate Cuts by the People's Bank of China: The People's Bank of China (PBOC) unexpectedly lowered its one-year policy loan rate by 20 basis points to 2.3%, marking the first reduction in nearly a year, following a cut in the seven-day reserve repo rate. This move reflects the central bank's increasing urgency to support the slowing economy amid disappointing growth figures.
Market Reactions and Implications: Following the rate cuts, China's bond futures and the yuan saw modest gains. Economists suggest that the PBOC's coordinated easing across key interest rates aims to address banks' reluctance to borrow from the central bank, as market borrowing costs have become more favorable.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
