China has sought to calm its panic-stricken stock markets by cutting interest rates and loosening constraints on bank lending after a second day of plunging share prices.
The People’s Bank of China (PBoC) reduced the one-year lending rate to 4.6% in a clear signal that it was prepared to head off a repeat of the stock market crash that hit the country in June. The benchmark Shanghai Composite fell by 7.6% on Tuesday, bringing its loss in the last two days to more than 15%.
The central bank also cut the one-year deposit rate to 1.75% in an effort to persuade Chinese savers to spend cash hoarded in the country’s banks.
China’s fifth interest rate cut since November lifted global markets, which recovered much of their losses after plummeting in response to China’s Black Monday.
via The Guardian