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Wednesday 8 October 2008
Mainland Joins World Central Banks in Co-Ordinated Rate Cuts
China’s central bank, acting in co-ordination with other central banks around the world, cut banks’ benchmark lending and deposit rates by 0.27 percentage point on Wednesday. PDF
Mainland Joins World Central Banks in Co-Ordinated Rate Cuts
Reuters 8 October 2008
China’s central bank, acting in co-ordination with other central banks around the world, cut banks’ benchmark lending and deposit rates by 0.27 percentage point on Wednesday.
The cost of one-year bank loans will fall to 6.93 per cent from 7.20 per cent, while the benchmark one-year deposit rate falls to 3.87 per cent from 4.14 per cent, the People’s Bank of China said.
The PBOC also cut the reserve requirement for all banks by 0.50 percentage point.
That lowers the requirement for big banks to 17 per cent and for other banks to 16 per cent.
The cut in lending rates takes effect on Thursday; the cut in reserve requirements goes into effect on Oct. 15, the bank said on its website, www.pbc.gov.cn.
The US Federal Reserve led a co-ordinated round of global official rate cuts, easing by a half percentage-point, as did the European Central Bank, Bank of England and Swiss, Canadian and Swedish central banks.
In an attempt to stem unprecedented global market turmoil, the Fed cut its key federal funds lending rate by half a percentage point to 1.5 per cent and also lowered its discount rate by the same amount to 1.75 per cent.
The ECB also cut by a half-point to 3.75 per cent as did the Bank of England, taking its rate to 4.5 per cent.
The Bank of Japan, with rates at just 0.5 per cent, did not ease but the Fed said the BOJ expressed its strong support for the coordinated policy action.
“Incoming economic data suggests that the pace of economic activity has slowed markedly in recent months,” the Fed said.
“Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.”
It said the vote to cut US rates was unanimous and that inflation expectations appeared to be diminishing which could help support price stability.
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Mainland Joins World Central Banks in Co-Ordinated Rate Cuts
Reuters
8 October 2008
China’s central bank, acting in co-ordination with other central banks around the world, cut banks’ benchmark lending and deposit rates by 0.27 percentage point on Wednesday.
The cost of one-year bank loans will fall to 6.93 per cent from 7.20 per cent, while the benchmark one-year deposit rate falls to 3.87 per cent from 4.14 per cent, the People’s Bank of China said.
The PBOC also cut the reserve requirement for all banks by 0.50 percentage point.
That lowers the requirement for big banks to 17 per cent and for other banks to 16 per cent.
The cut in lending rates takes effect on Thursday; the cut in reserve requirements goes into effect on Oct. 15, the bank said on its website, www.pbc.gov.cn.
The US Federal Reserve led a co-ordinated round of global official rate cuts, easing by a half percentage-point, as did the European Central Bank, Bank of England and Swiss, Canadian and Swedish central banks.
In an attempt to stem unprecedented global market turmoil, the Fed cut its key federal funds lending rate by half a percentage point to 1.5 per cent and also lowered its discount rate by the same amount to 1.75 per cent.
The ECB also cut by a half-point to 3.75 per cent as did the Bank of England, taking its rate to 4.5 per cent.
The Bank of Japan, with rates at just 0.5 per cent, did not ease but the Fed said the BOJ expressed its strong support for the coordinated policy action.
“Incoming economic data suggests that the pace of economic activity has slowed markedly in recent months,” the Fed said.
“Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.”
It said the vote to cut US rates was unanimous and that inflation expectations appeared to be diminishing which could help support price stability.
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