China slashes interest rates
26-11-2008
China has announced its biggest interest rate cut since 1997 in a bid to stimulate the economy. Both lending and savings rates have been cut by 1.08 percent. The new lending rate will be 5.58 percent, while savings will give a return of 2.52 percent. The move came on the heels of an US$800 billion credit market bailout from the US Federal Reserve. It also followed a revised World Bank forecast that mainland growth next year would be around 7.5 percent, the lowest rise since 1990. The People's Bank of China also reduced reserve requirements by 1 percentage point for big banks and by 2 percentage points for smaller banks. "It's certainly a lot more aggressive than anything they've done recently. I think it speaks volumes about just how much China has slowed down," said Anthony Muh of AT Asset Management in Hong Kong.
