Central bank rate cuts offset pressure on economic growth

THE PEOPLE'S BANK OF CHINA lowered the benchmark interest rates for both one-year loans and deposits by 0.25 percent from Monday, and raised the upper limit of the floating band of deposit interest rates. This is the third time the central bank has cut interest rates in the last six months. Comments:

China has to lower the actual interest rate by further cutting the nominal interest rate to maintain growth. However, this round of interest rate cuts should not be interpreted as a Chinese version of quantitative easing.

Ma Jun, chief economist of the research bureau of the People's Bank of China, May 10