China cuts interest rate a week ahead of next week’s release of second quarter stats
China's central bank cut interest rates for the second time in two months to bolster an economy widely expected to record its sixth successive slide in growth in April-June.
China announced the rate cut as the Bank of England launched a third round of monetary stimulus and the European Central Bank cuts its main interest rate. Policymakers globally are trying to combat the impact of the Euro area debt crisis on the world economy.
China's benchmark lending rates will be lowered by 31 basis points to 6%, and deposit rates will be cut by 25 basis points to 3%, the People's Bank of China said in a statement on its website.
The cuts announced Thursday are effective from Friday. The central bank last cut interest rates on June 7.
The central bank also took another step in liberalising interest rates by lowering the floor for lending rates to 70% of benchmark rates from 80% previously.
China is due to release data next week covering the second quarter and the month of June.
A poll published showed that economists expect the data to show China's economy expanded in the second quarter by 7.6% from a year earlier, its weakest performance since the 2008-09 financial crisis.
That would be down from 8.1% in the first quarter and a sixth straight quarter of slowing growth.
China has lowered the amount of cash banks must keep in reserve in three 50-basis point steps since November, freeing up an estimated 190 billion dollars for fresh lending. The last cut was in May.
Beijing has also fast-tracked investment projects and rolled out new incentives to spur consumer spending on energy-efficient products, but it has studiously avoided any hint so far of putting together a repeat of the 4 trillion Yuan fiscal spending package rolled out in 2009-10.