China’s central bank cut its key interest rate for the first time in almost two years to help bolster an economy that has lost momentum because of a property slump and repeated virus outbreaks.
In a stark policy divergence from other major economies, the People’s Bank of China lowered the rate at which it provides one-year loans to banks by 10 basis points the first reduction since April 2020.
While inflation is the dominant concern for central bankers in the US and Europe, China’s relatively stable prices mean that policymakers have shifted to boosting growth.
Official data yesterday showed that China’s GDP
Inflation in China eased last month due to falling food and commodity costs, with analysts saying that yesterday’s figures give policymakers room to unveil measures to kick-start the stuttering economy, including interest rate cuts.
The producer price index rose a less-than-expected 10.3 percent year-on-year last month, extending a slowdown in November, while the consumer price index (CPI), a key gauge of retail inflation, was 1.5 percent down from 2.3 percent a month earlier and also short of forecasts, the Chinese National Bureau of Statistics reported.
The consumer inflation slowdown came on the back of easing vegetable prices, bureau senior statistician Dong