China’s central bank has cut its main policy rate for the first time in 10 months as new data reinforced concerns over a stalling post-Covid recovery in the world’s second-largest economy.The People’s Bank of China trimmed its medium-term lending facility rate, a one-year rate that influences bank funding costs, from 2.75 per cent to 2.65 per cent, amid widespread expectations that Beijing would be forced to take further action to support the economy.
The rate cut came after the central bank this week unexpectedly lowered the seven-day reverse repo rate, an important gauge for short-term banking sector liquidity, and unveiled tax breaks for businesses.
The move, which was accompanied by a disappointing data report for May, signalled official dissatisfaction with the state of the Chinese economy, which was widely expected to bounce back after authorities abandoned strict coronavirus controls at the start of the year.