Wanting to boost its economy, China chooses to go in the opposite direction of the US and the West.

On June 20, the People's Bank of China (PBoC) cut two key interest rates, following similar measures last week - part of efforts to combat the growth slowdown after the Covid-19 pandemic in the country.

Muốn thúc đẩy nền kinh tế, Trung Quốc đi ngược chiều với Mỹ và phương Tây

China continues to cut two important interest rates to boost the economy . (Source: Xinhua)

Accordingly, the one-year loan prime rate (LPR) was adjusted down 10 basis points to 3.55%, while the five-year term also decreased from 4.3% to 4.2%.

The latest rate cut follows two monetary easing moves last week.

The PBOC cut the one-year medium-term lending facility from 2.75% to 2.65% on June 15. It also lowered the seven-day reverse repo rate on June 12 for the first time since August 2022, from 2% to 1.9%.

The move will effectively lower real lending rates, reduce financing costs, stimulate credit demand and strengthen the growth momentum of consumption and investment, said the National Institute of Finance and Development.

The PBoC’s recent rate moves come as new data shows China’s economy continues to struggle. Through monetary easing, leaders are trying to boost growth after a hoped-for economic recovery following three years of lockdowns has lost momentum.

China's efforts contrast with moves by the United States and other Western nations, which have been forced to implement a series of interest rate hikes while reducing money supply to curb inflation.

Source