China’s central bank will reduce the benchmark interest rate – People’s Daily

(Source: Xinhua)

05/11/2015 08h26

The People’s Bank of China (PBOC) said on Sunday it would cut the benchmark interest rate deposits and loans by 25 basis points from May 11

After this reduction, the deposit rate for one year will be 2.25%, while that of loans will reach 5.1 %, according to a statement.

This is the third rate cut by the central bank since last November and this action represents a new effort of the country to address the growing pressure of the economic downturn.

This decision is aimed at reducing financing costs in order to strengthen the real economy and to provide a modest monetary environment facing the country’s current economic restructuring.

The central bank also decided to adjust the ceiling of the target range of deposit rates to 1.5 times the reference level, against 1.3 times before, marking a new step towards the liberalization of the interest rate mechanism.