Big challenge for China to start the stalled pace of the economy, resorted to cutting interest rates

China Economy: China has been continuously struggling to speed up its economy since Corona. In this episode, China has announced a reduction in interest rates. China's GDP growth rate was negative in May.

Jun 20, 2023 - 10:10
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Big challenge for China to start the stalled pace of the economy, resorted to cutting interest rates

Several measures are being taken by the Chinese central bank to revive the economy once again. Recently, the People's Bank of China announced a cut in interest rates to save the economy from going into recession.
The one-year loan prime rate by China has been reduced by 10 basis points to 3.55 percent, which was earlier 3.65 percent. At the same time, the five-year prime rate has been reduced from 4.3 percent to 4.2 percent. This is the first time in August that interest rates have been reduced.
Shares of Chinese companies listed on the Hong Kong stock market slipped after China's banks announced a cut in interest rates. Because of this, the property index there fell by 3 percent. A Reuters poll suggested the industry was expecting a 15 basis point cut in the five-year rate. This is the reason why this decline has been seen.
The Hong Kong stock market is witnessing a decline due to the fall in the property index. At the same time, the Chinese yuan is also running at its lowest level since November. Most of the loans in China are given on the basis of a one-year loan prime rate only.
According to the data released by the Chinese government, the economy there saw a decline of 4.6 percent in May. This was the biggest decline in China's economy since 2016. Due to this, there is a possibility of China's economy going into recession.
Due to the decline in the economy in May, Goldman Sachs and JP Morgan have reduced the overall growth target for China's economy.

Muskan Kumawat Journalist & Writer