BEIJING (Reuters) - China's central bank announced on Monday a slight cut in one of its preferential interest rates imposed by commercial banks on its customers, a move aimed at bolstering the country's economy, which is suffering the consequences of a trade war
China's central bank confirmed on its website the one-year benchmark interest rate on bank loans was fixed at 4.2 percent, compared with 4.25 percent in August.
The five-year benchmark interest rate on bank loans remains at 4.85 percent.
This new monetary easing was expected as the economic situation in the world's second largest economy continues to decline.
Exports, one of the pillars of China's economic growth, fell 1 percent in August (from 3.3 percent a month earlier), and Chinese production was at its weakest pace in 17 years.
The Chinese economy has been suffering for more than a year from the repercussions of a trade dispute with Washington, translated by mutual imposition of surcharges on hundreds of billions of dollars worth of goods.
Analysts at Beijing-based Trevium China say the central bank has "clearly stated in recent months that its main concern is not the cost of loans but the accessibility of private companies," which are deprived of gains for large and often unprofitable public groups.
In early September, the central bank announced a reduction in deposits that banks must keep in their vaults, a measure designed to enable them to extend more loans to companies facing an economic slowdown.
But Julian Evans-Pritchard, an analyst at Capital Economics, said the impact "on the economic movement would be marginal."
GDP growth in the second quarter was 6.2 percent, the lowest level in at least 27 years.
Source Sky News