China cuts benchmark interest rates by 27 basis points

A man stands in front of an electronic board showing stock information
at a brokerage house in Hefei, Anhui province October 29, 2008.
China's main stock index slipped 2.94 percent on Wednesday as worries
about weak earnings and a slowing economy returned to the fore after
an early rally spurred by strong overseas markets faltered
at a key technical level.
REUTERS/Stringer (CHINA)
From China Daily:

BEIJING -- China's central bank cut banks' benchmark lending and deposit rates by 0.27 percentage point on Wednesday, the third cut in six weeks, to prop up consumption and spur economic growth.

The benchmark one-year deposit rate would drop to 3.60 percent from 3.87 percent, while the benchmark one-year lending rate would fall from 6.93 percent to 6.66 percent, the People's Bank of China said on its website (www. pbc.gov.cn).

The move would become effective on October 30.

Analysts say the move is aimed to reduce borrowing costs of enterprises, propell domestic investment, and it will also be conducive for the equity market.

The central bank also cut interest rates and reserve requirements on September 15 and October 8. The latter move coincided with rate cuts by leading central banks around the world.

China's benchmark Shanghai Composite Index closed at 1,719.81 points on Wednesday, down 52 points, or 2.94 percent. The Index climbed 2.8 percent to close at 1,771.82 the previous day.

The move came amid rate cuts by worldwide central banks to stimulate the slacking economy.

The US Federal Reserve and Japan's central bank are also expected to cut rates later on Wednesday to reduce the impact of the world financial crisis on the economies.

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3. Fed Raises Interest Rate Paid For Excess Bank Reserves
4. Iceland's central bank unexpectedly raised the benchmark interest rate to 18 percent

Sources :

China Daily: China cuts benchmark interest rates by 0.27 pct, October 29, 2008 19:35

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