PBoC lowers interest rates to boost economy
(27 August 2015 – China) The People’s Bank of China (PBoC) cut its benchmark interest rates and the amount of cash banks must keep on hand as it tried to boost its economy following the collapse of share prices.
The bank lending rate was lowered to 4.6 percent on 25 August, and deposit rates reduced by 25 basis points with the central bank also scrapping the ceiling for deposit rates for tenures of over a year, to further free up China’s interest rate market.
Chinese premier Li Keqiang said there was no basis for the yuan currency to weaken further and the exchange rate would be maintained at a "basically stable" level, state media reported.
Li described the move by the PBOC to devalue China's currency as an "appropriate response" to developments in international financial markets, Xinhua reported.
"Such adjustment was also made as part of China's ongoing reform efforts," he said.
A hard landing has still been predicted for China following the devaluation of the yuan and the near-collapse of its stock markets over the past few months sparking fears the country’s economy is sinking.
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