China chop rates

Country:  China

27 November 2008

China’s Central Bank announced its biggest interest rate cut in 11 years yesterday to spur private borrowing and support a multibillion-pound stimulus package to boost slowing economic growth.

The benchmark one-year lending and deposit rates will both be reduced today by 1.08% to 5.58%, with the benchmark one-year deposit rate cut by the same mount to 2.52%, the People’s Bank of China said in a statement.

The cut was the fourth in three months and reflects the government’s urgency about raising private consumption and investment to supplement State spending on the stimulus package.

“This is the most aggressive monetary easing in recent years and should bode well for China’s stock market performance”, said Jing Ulrich, chairwoman of China equities for JP Morgan & Co.

The fall in borrowing costs could also help rejuvenate China’s housing market which has slowed of late. Trading volumes in Shanghai’s residential property market have already staged a recovery in the last two weeks following the government's decision to introduce a stimulus plan last month. Statistics show that property sales in Shanghai last week rose 24.6%.

The central bank move came a day after the World Bank said it expected China’s economy to grow by 7.5% in 2009, a 19-year low.

Browse other Chinese property news stories, read articles about investing and buying property in China or view our range of property in China.