China slashes rate, pumps US$7 billion into market to counter COVID-19 impact

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China's central bank on Monday cut an interest rate on loans to banks by the largest margin in five years and injected 50 billion yuan ($7 ...

The latest move comes as governments and central banks around the world ease monetary policy and unveil titanic stimulus measures worth around $5 trillion to counter the economic impact of the pandemic, which forecasters warn will cause a deep recession.

The politburo said where appropriate, the fiscal deficit ratio should be raised, special treasury bonds should be issued, and that there should be an increased quota of local government special bond issuance, China's official Xinhua News Agency reported. Effective loan rates should also be guided down,"maintaining reasonable and sufficient liquidity", officials added.

As COVID-19 ravages the global economy, analysts have cut growth forecasts for China, which was the first to see the effects from containment measures aimed at halting its spread.

 

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