The People’s Bank of China on Saturday cut both the country’s one-year benchmark lending rate and one-year deposit rate by 0.25% to 4.85% and 2%, respectively, while also lowering the reserve requirement ratio by 0.5% for banks with sizable lending to small businesses and farmers – the first time it has cut both on the same day since the height of the global financial crisis in October of 2008 – The Wall Street Journal reported. HSBC economist Ma Xiaoping said the move reflected the central bank’s desire to stimulate the economy, fight deflationary pressure and respond to last week’s sharp market decline, which has wiped out US$1.25 trillion in market capitalization–an amount roughly equal in size to Mexico’s economy.
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