China cuts 1-year benchmark rate, moving to boost economy as world markets languish

China has ratcheted up its effort to spur slowing growth by cutting a key policy rate and interest paid on bank deposits

China Economy (Copyright 2024 The Associated Press. All rights reserved)

China ratcheted up its effort to reinvigorate its economy Thursday by cutting a key policy rate and interest paid on bank deposits.

The move coincided with a downturn in world stocks, extending losses in Chinese markets that have declined this year while share prices soared in many other countries.

By midday, Hong Kong's Hang Seng was down 1.4% and the Shanghai Composite index lost 0.4%.

The People’s Bank of China said it cut the lending rate for one-year medium term policy loans by 20 basis points to 2.3%. The rate on 7-day loans was reduced to 1.7%. Major state-run banks cut deposit rates to relieve pressure on their finances.

Earlier this week, the central bank cut several other lending rates, sticking to a cautious approach to stimulating the economy.