China’s leaders and central bank are ready to loosen lending restrictions and cut interest rates a second time following Friday’s surprise cut in rates, Reuters reported, citing unnamed sources. Friday’s cut, the first more than two years, lowered one-year benchmark lending rates by 40 basis points to 5.6%. A senior economist at a government think-tank involved in internal policy discussions who declined to be named said that the People’s Bank of China had shifted its focus toward broad-based stimulus and was open to more rate cuts as well as a cut to the banking industry’s reserve requirement ratio, which effectively restricts the amount of capital available to fund loans.
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