SHANGHAI/SINGAPORE — China’s central bank unexpectedly lowered key rates for the second time in three months on Tuesday, another sign that authorities are stepping up monetary easing efforts to spur a hesitant economic recovery.
The People’s Bank of China (PBOC) has announced that it has lowered the rate of 401 billion yuan ($55.25 billion) of medium-term loans (MLF) granted to certain financial institutions by 15 basis points to 2.5% against 2.65% previously. .
In a Reuters poll this week of 26 market watchers, 20 respondents, or 77%, predicted the central bank would leave the MLF rate unchanged. Only six respondents foresee a marginal reduction in the rate.
The central bank also injected 204 billion yuan through seven-day reverse repos while cutting borrowing costs by 10 basis points to 1.8% from 1.9% previously, it said. stated in an online statement.
The PBOC lowered key rates in June to support the wider economy, but the data has been getting weaker ever since.
($1 = 7.2585 Chinese Yuan)
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