China’s newly announced cut in interest rates is the fourth cut since mid-September and biggest since the Asian financial crisis in 1997. The People’s Bank of China lowered its benchmark one year rate to 5.58% from 6.66%, to take effect on Thursday. The central bank also lowered the reserve requirements it imposes on banks, by 1% point for big banks and 2% points for smaller banks.
None of this is a surprise, though the size of the rate cut has been to some. That in itself is another signal that the economy is slowing faster than desired, and how seriously Beijing is taking remedying that.