News

People’s Bank of China Cuts Benchmark Lending Rate For Economic Survival

China’s Central Bank cut a benchmark lending rate on Tuesday to boost economic growth in the country. The People’s Bank of China reduced the five-year loan prime rate from 4.2% to 3.95%. However, the one-year loan prime rate, which serves as a benchmark for corporate loans, remains the same at 3.455.

Notably, the five-year loan prime rate was last lowered in June, while the one-year LPR was last cut in August. According to reports, these are the largest reductions in rates since their introduction in 2019, and both rates are the lowest in history.

In January 2024, China announced it would cut the Reserve Requirement Ratio (RRR) in banks to defend markets and increase growth. The recent move aims to encourage commercial banks to provide more credit at better rates. Unlike other economies that are increasing rates to control inflation, China has done the exact opposite.

In 2023, the country reported one of its worst annual growths since 1990, lowering the possibility of a quick economic recovery after the end of severe COVID restrictions in late 2022. China is struggling with several challenges, such as the persisting property sector crisis and the increase in unemployment among youth. Last month, consumer prices fell rapidly, at the fastest rate in the last 14 years. Therefore, the Chinese government has been put in a position to take active measures to revive the dying economy. 

The deflation in the Chinese economy can put a pause on the profits earned by companies, ultimately impacting employment and demand in the industry in the long term. Policymakers have taken several steps in order to increase consumption. However, these measures have not really worked in their favour, as there has been very little impact.

Shubhangi Srivastava

Shubhangi is a budding professional with a love for storytelling and an eye for detail. A journalism student and content enthusiast currently working at Tecuy Media. She is eager to bring freshness to the writing field and explore the world through her words.

Recent Posts

The Concept of an AI Death Calculator: What It Is and Why It Matters

Artificial Intelligence (AI) continues to revolutionize industries, transforming the way we live and work. One…

3 weeks ago

How to Leverage Financial News for Share Market Insights

Being well-informed about the latest financial news and market developments can give you an edge…

3 weeks ago

Karan Jotwani: Biography, Wiki, Age, Family, Career Highlights

One Indian actor who has become famous for his roles in TV series is Karan…

4 weeks ago

Zubeen Garg: Net Worth, Biography, & Income

Zubeen Garg is a renowned Indian philanthropist, composer, songwriter, and performer. His contributions to Bengali,…

4 weeks ago

Importance of Using Invoice Template in Word

Word-based invoice templates produce bills smoothly for clients and track amounts in an invoice template.…

1 month ago

Find the Best Car Mechanic Near Me in Australia: Top Services Reviewed

Looking for a reliable car mechanic near me in Australia? This guide will help you…

2 months ago