China's central bank cuts interest rates in growth move

• [size=1.4]5 February 2015
  
  
• From the section[size=1.4]Business
  

[size=1.4]China's interest rate cuts are aimed at boosting slowing economic growthGlobal Economy

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[size=1.8]The Chinese central bank has cut its benchmark interest rates for the second time in two months, in a bid to arrest slowing economic growth.

[size=1.8]Benchmark lending rates will be cut from 6.31% to 6%, while deposit rates will fall from 3.25% to 3%.

[size=1.8]The rate cuts will come into force on Friday and closely follow on from the last cuts made on 7 June.

[size=1.8]Before these moves, the People's Bank of China had not cut interest rates since 2008.

[size=1.8]Commenting on the move, Rupert Armitage, director at Shore Capital, said: "China are cutting rates because they're experiencing a slowdown.

[size=1.8]"Everybody's been concerned about the economy, but now they're actually doing something about it."

[size=1.8]The central bank's rate cuts come on the back of a gradual liberalisation of China's banking system.

[size=1.8]Banks can now compete on the interest rates they offer customers, within a stipulated range.

[size=1.8]China's export growth has been hit by a fall in demand from two of its biggest markets, the US and Europe, still struggling with the global debt crisis.

[size=1.8]China's economy grew at an annual rate of 8.1% in the first quarter, the slowest pace in almost three years.

[size=1.8]It hopes lower interest rates will help boost domestic demand.