China Economic Slowdown: Trying to avoid recession in the economy, China reduced interest rates for the second time in 3 months
China Economic Slowdown: Continuous efforts are being made by China to avoid a slowdown in the economy. For this reason, the interest rate has been reduced by the Chinese central bank once again in August. Earlier in June, the People's Bank of China had cut the interest rate. The Chinese economy has been struggling since Corona.
On Monday, the Central Bank of China announced a cut in interest rates to deal with the slowdown in the economy after Corona. This is the second time in the last three months that the Chinese central bank has announced a cut in interest rates.
The People's Bank of China (PBoC) issued a statement saying that the one-year prime rate has been reduced from 3.55 percent to 3.45 percent. The one-year prime rate is used for corporate loans. At the same time, the five-year LPR has been reduced to 4.2 percent. It is used for giving secured loans.
After this cut by the Chinese central bank, the interest rate has reached a historically low level. Earlier in June, the People's Bank of China had reduced the one-year loan prime rate by 10 basis points to 3.55 percent. At the same time, the five-year prime rate was reduced from 4.3 percent to 4.2 percent.
China's effort is to encourage banks to give more loans by reducing interest rates. So that more people can take loans at low-interest rates and the economy can be accelerated.
Apart from this, this move of China is being seen as a step to attract investment from other countries. Because western countries are continuously increasing interest rates to control inflation. In such a situation, China is trying to slow down the economy by reducing interest rates.
The Chinese economy suffered a lot due to the long lockdown due to Corona. Due to this, there was a big decline in China's growth rate.
