Earlier today the Peoples Bank of China announced they are cutting benchmark interest rates by 0.25%
- lending rate now 5.35%
- savings rate now 2.5%
- deposit rate now 2.5%
- will lift ceiling for floating range for savings rates to 1.3x benchmark
Interest cuts had been mooted for a while but not necessarily so soon so this comes somewhat as a surprise. On Wednesday Eamonn reported the China Securities Journal expecting cuts this year,but not yet, and in the reserve requirement ratio too, which so far remains on hold
Impact on Aussie $ will depend largely on whether markets regard the rate cuts as a sign of weakness to stem further slowdown,or encourage renewed growth ( yes, a fine line I know) and tomorrow we also have the latest mftg and non-mftg Chinese PMIs which Eamonn previewed here
Yesterday the Yuan weakened to its lowest levels vs USD since Oct 2012