Economics
PBOC Cuts Interest Rate for One Year Loans to Support Banks
- Central bank withdrew a net 700 billion yuan from market
- Economists forecast loan prime rate to drop on Feb. 20
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China’s central bank provided medium-term funding to commercial lenders and cut the interest rate it charges for the money, a move widely anticipated by analysts to cushion the economy from the virus epidemic.
The People’s Bank of China offered 200 billion yuan ($29 billion) of one-year medium-term loans on Monday. The rate was lowered by 10 basis points to 3.15%, the lowest since 2017. The central bank also added 100 billion yuan of funds via 7-day reverse repurchase agreements, resulting in a net 700 billion yuan withdrawal of money from markets as some 1 trillion yuan of reverse repos matured on Monday.