Wednesday, 26 November 2008

China to Cut Benchmark Lending, Deposit Rates by 108 BPS

China said Wednesday it will cut its benchmark deposit and lending rates by 108 basis points to foster steady credit growth as part of its “moderately loose” monetary policy.

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Guanyu said...

China to Cut Benchmark Lending, Deposit Rates by 108 BPS

Dow Jones Newswires
26 November 2008

BEIJING -- China said Wednesday it will cut its benchmark deposit and lending rates by 108 basis points to foster steady credit growth as part of its “moderately loose” monetary policy.

The People’s Bank of China said in a statement it will cut the one-year yuan lending rate to 5.58% from 6.66%, and the one-year yuan deposit rate to 2.52% from 3.60%.

The rate cuts, which take effect Thursday, are substantially larger than the PBOC’s last reductions of 27 basis points, and also above the 54- to 81-basis-point cut the market had been expecting.

The central bank said it is also cutting the reserve requirement ratio from Dec. 5 by 100 basis points for six big banks, and by 200 basis points for smaller banks.

It was the fourth time since mid-September that China cut the benchmark lending rate, and the third time since early October that it cut the key deposit rate.