China Cuts Interest Rate Again

On rate cuts, China is moving in sync with the rest of the world. China's central bank cut its benchmark interest rate by 27 basis points on Wednesday, after a coordinated rate cut took place in several major economies of the world. This is China's second rate cut within a month. Now the one-year lending and deposit rates stand at 6.93% and 3.87%. While the rate cut is insignificant in magnitude, the move has indicated China's willingness to join the global financial community as a stakeholder to tackle the current crisis. With reliance on export-driven growth and significant holdings of U.S. Treasury bills, China has found itself increasingly integrated into the global economy. Besides the rate cut, China has also suspended the 5% tax on interest income for individuals. Market Recap The Chinese equity markets declined... [read full story]