China’s central bank cuts interest rate on loans to banks by biggest amount since 2015 – The National

China’s central bank cuts interest rate on loans to banks by biggest amount since 2015 – The National

China's central bank cut the interest rate it charges on loans to banks by the biggest amount since 2015, as the authorities ramp up their response to the worsening economic impact from the coronavirus pandemic.. The central bank said this will keep liquidity sufficient to help the real economy.. The first cut to a PBOC policy rate since February is in line with a pledge by the Communist Party's leadership on Friday to increase support to the economy through increased sales of sovereign debt, as domestic and international demand slumps due to the pandemic.. The step also brings the PBOC closer in line with the stance of global peers, who have loosened policy dramatically in recent weeks.. A reduction in the central bank's main tool to adjust the price of market liquidity also signals coming reductions in its main one-year funding tool, and potentially a corresponding cut to the benchmark deposit rate.. Reductions to policy rates should also be reflected in the main market benchmark of the cost of lending to companies, the loan prime rate.. A benchmark deposit rate cut is necessary.". In a separate statement published late on Friday, the PBOC called for better coordination of global macro