China cuts interest rate in existing lending facility in April

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Last updated: Monday 18 Ramadan 1441 AH – May 11, 2020 KSA 09:29 – GMT 06:29
Posted on: Monday 18 Ramadan 1441 AH – May 11, 2020 KSA 08:23 – GMT 05:23Source: Shanghai – Reuters

The Chinese central bank said it cut interest rates on its tool known as the “existing lending facility” in April, to follow similar cuts in prices for other liquidity management tools as part of Beijing’s efforts to shore up the economy hit by the Coronavirus.

The People’s Bank of China said in its monetary policy report for the first quarter of the year that it lowered the price by 30 basis points on the tenth of April, to become the costs of borrowing for one night, seven days and a month 3.05%, 3.2% and 3.55%, respectively.

The People’s Bank of China has embarked on a number of measures to support the economy since the outbreak of the Corona virus, by reducing major interest rates and reducing the mandatory reserve ratios for banks in order to enhance liquidity in the financial system and reduce financing costs.

The Prime Minister told a recent cabinet meeting that the government is aiming to finish a new trillion yuan special bond issue by the end of May.

The central bank cut the price of a one-year medium-term lending facility for financial institutions twice this year by a total of 30 basis points to 2.95%, the lowest level for the liquidity enhancement price since its introduction in September 2014.







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