China’s central bank cut the interest rate on its medium term loans on Monday as policymakers try to reduce the economic shock from a coronavirus outbreak that is severely disrupting business activity, reported Reuters.
The People’s Bank of China (PBOC) said it was lowering the rate on RMB 200 billion ($28.65 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions by 10 basis points (bps) to 3.15% from 3.25% previously. No MLF loans had been set to mature on Monday.
Earlier this month, as the virus outbreak escalated, the PBOC unexpectedly lowered the interest rates on reverse repurchase agreements by 10 bps. Monday’s move is expected to pave the way for a cut in the country’s benchmark loan prime rate, which will be announced on Thursday.