China central bank makes unexpected rate cut

Bucks analysts' forecasts

The People's Bank of China cut policy rates for the second time in three months as the the government attempts to use monetary easing to kick start the sluggish economy.

The People's Bank of China cut the rate on the medium-term lending facility (MLF) overnight, with a 15bp cut down to 2.5%. Analysts told Reuters, the move opened the door to a potential cut in China's lending benchmark loan prime rate (LPR) next week. Janet Mui: Reading the China policy tea leaves is getting more difficult The Chinese central bank also gave the economy a cash boost with an injection of  204 billion yuan through seven-day reverse repurchase agreement, while cutting borrowing costs by ten basis points to 1.80% from 1.90% previously. Central bank action has been tr...