China’s Central Bank Cuts Key Short-Term Rate to Buoy Economy

(Bloomberg) — The People’s Bank of China cut a key short-term policy rate for the first time in almost a year, stepping up support for the economy after growth disappointed and steering a shift toward a new policy benchmark.

The seven-day reverse repo rate is lowered by 10 basis points to 1.7%, the PBOC said in a statement Monday. This aims to optimize the open market operation mechanism and increase financial support for the economy, it added. Chinese banks followed the move about an hour later by lowering their main benchmark lending rates, or the loan prime rates (LPR), by 10 basis points each.