Last year, China’s economic growth fell to 7.4%, the lowest since 1990
Beijing: China on Saturday cut interest rates for the second time in three months, adding to signs that Chinese leaders are worried that the economic slowdown is deepening too sharply.
The People’s Bank of China announced a rate cut on one-year loans by commercial banks by 0.25 percentage point to 5.35 per cent. The interest rate paid on a one-year deposit was lowered by 0.25 point to 2.50 per cent.
Rates were last cut on Nov. 22. The new rates take effect Sunday.
Last year, China’s economic growth fell to 7.4 per cent — the lowest since 1990. It is expected to decline further this year, and a steep economic decline can raise the risk of politically dangerous job losses.
The latest round of cuts follow a string of tax reductions and other measures aimed at propping up growth. The government cut business taxes last week and has announced a pay hike for civil servants.
The lower rates are expected to reduce financial costs for state companies and are a signal to state-owned banks to boost lending to them.
Economic growth in the world’s second-largest economy has declined steadily over the past two years, mostly as a result of government efforts to steer the economy to more self-sustaining growth based on domestic consumption and to reduce reliance on trade and investment.
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IMC Group