Baerrus Magnus
All posts from Baerrus Magnus
Baerrus Magnus in Options Trader; hang out at,

China Cuts Rates In Attempt To Boost Confidence In Market

The one-year lending rate will drop by 25 basis points to 4.6 percent effective Wednesday, the Beijing-based People’s Bank of China said on its website Tuesday, while the one-year deposit rate will fall a quarter of a percentage point to 1.75 percent. The required reserve ratio will be lowered by 50 basis points for all banks to cover funding gaps, it said.

China’s surprise yuan devaluation on Aug. 11 led to a tightening in liquidity as the PBOC subsequently bought its currency to stabilize the exchange rate and curb capital outflows. The yuan may face more downside pressure as a result of the latest monetary easing, making it harder to keep depreciation in check. A 22 percent stock market plunge over four days added pressure for broad stimulus as authorities pull back from other direct efforts to boost equities.

source: Bloomberg