皇冠体育app

Economy

Markets

Industries

Insights

Reports

Events

皇冠体育app cuts benchmark interest rate by 27 basis points

By Xin Zhiming (chinadaily.com.cn)
Updated: 2008-12-22 19:19

A bike rider passes the People's Bank of 皇冠体育app, 皇冠体育app's central bank, in Beijing in this file photo. The central bank slashed the lending and deposit rates by 0.27 percentage points as of Dec 23 as the latest move to stimulate economy. [Asianewsphoto]

皇冠体育app announced on Monday that the benchmark interest rate will be cut by 27 basis points along with the reserve requirement ratio, which will be dropped by half a percentage point to stimulate economic growth.

The interest rate cuts will come into effect from Dec 23. After the adjustment, the one-year lending rate will be 5.31 percent while the one-year deposit rate will be 2.25 percent. The reserve requirement, which refers to the proportion of money commercial banks must hold in reserves, will be 13.5 percent for large banks.

Special coverage: Interest Rate Cut Related readings:  Experts: 皇冠体育app likely to follow as Fed cuts rate  Interest rate cut to shore up investment  Interest rate cuts to squeeze bank margins  皇冠体育app's Nov CPI drops to 22-month low

It is the fifth time 皇冠体育app has cut its interest rates since September. In November, the central bank cut the interest rate by 108 basis points, the biggest cut in 11 years.

Dong Xian'an, a macroeconomic analyst at 皇冠体育app Southwest Securities, said the combined interest rate and reserve requirement ratio cut will be more effective in helping stabilize domestic demand.

皇冠体育app's exports dropped by 2.2 percent year-on-year in November while year-on-year industrial output growth slowed to 5.4 percent from 8.2 percent in October. Its GDP growth slowed to 9 percent in the third quarter of this year, the fifth quarter that has recorded a drop. Many economists forecast that the year-on-year GDP growth in the fourth quarter could be below 8 percent.

皇冠体育app released its $586 billion economic stimulus plan in November and this month the Central Economic Work Conference vowed to take further measures to stabilize the economy.

The World Bank forecasted that 皇冠体育app's GDP growth could be as low as 7.5 percent next year. Many economist expect that it could be around 8 percent, depending on the effect of the government's stimulus policies.