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China cuts lending rates to boost economy

China cuts lending rates to boost economy

The People's Bank of China has lowered its key lending interest rate, in line with expectations, in an attempt by policymakers to move to reduce corporate financing costs and support the economy in light of the spread of the Coronavirus.

The Central Bank of China reduced interest rates on loans for a year to 4.05 percent from 4.14 percent, and in the same way the interest rates for five-year loans were reduced from 4.80 to 4.75 percent.

Analysts believe the cut will be a step to help the Chinese economy, which has faced many difficulties since the outbreak of the coronavirus in the past period.

The outbreak has affected global supply chains and caused widespread disruption to business activities and factories in China, prompting authorities to take a series of actions over the past few weeks to mitigate the impact on growth.

In terms of corona developments, the central Chinese province's health committee said Thursday that the province recorded 349 new cases of MERS-CoV on Wednesday, down from 1,693 on Tuesday. This brings the number of confirmed Coronavirus cases in Hubei province to 62,031.

The number of deaths in the region from the Corona outbreak reached 2,029 by the end of Wednesday, up 108 from Tuesday.

Outside China, South Korea reported 31 new cases of MERS-CoV on Thursday, bringing the number of people infected in the country to 82.

Moreover, Chinese Yuan fell by 0.19 percent at 7.0102 to reach the lowest level in more than two months against the dollar after the interest rate cut, driven by pressure from expectations of further monetary easing.

The offshore Yuan (USDCNH) plummeted 0.11 percent to 7.20220 per dollar.

Meanwhile, the dollar index, which measures the performance of six major currencies against the US dollar, soared 0.10 percent at 99.68, touching the highest level since May, 2017 at 99.77.

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