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The central bank cut a key interest rate as part of its latest move to stabilize China’s economy, as Asian stock markets tracked Wall Street’s slide.
By Keith Bradsher
Reporting from Beijing
China’s central bank cut its key interest rate on Thursday, the second move Beijing took this week to try to offset a weakening economy and a real housing market crisis.
The action came as stock markets fell sharply across most of Asia, echoing Wall Street’s sharp decline the previous day. Stock indices fell 1 to 3 percent in Australia, Japan, South Korea and Hong Kong.
But percentage costs fell less in Shanghai and Shenzhen. This may simply reflect a positive investor reaction to the central bank’s rate hike, or a signal of intervention through the Chinese government, which plays a role in the country’s inventory markets.
When markets opened in China on Thursday, the People’s Bank of China, the central bank, cut its interest rate on one-year loans to advertising banks from 2. 5% to 2. 3%. This is the biggest drop in this rate since a similar relief in April 2020, when the Chinese economy suffered due to a near-nationwide lockdown at the start of the coronavirus pandemic.
The central bank surprised the markets because it only reviews the interest rate on one-year loans on the 15th of each month. It held the rate steady on July 15 and also left it unchanged on Monday when it adjusted the other rates.
The People’s Bank of China said in a statement that the rate cut announced Thursday was aimed at “maintaining moderate and sufficient liquidity in the banking formula at the end of the month. “
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