ISLAMABAD (TDI): China’s central bank reduced interest rates and injecting liquidity into the banking system, aiming to steer economic growth back toward this year’s target of approximately 5%.
This move is part of a final push for stimulus ahead of the week-long holidays starting October 1.
China Cuts Interest Rate
Following a recent meeting of the Communist Party’s top leaders, which highlighted the urgent need to address economic challenges.
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The government plans to issue special sovereign bonds worth around 2 trillion yuan ($284.43 billion) this year as part of its fiscal stimulus strategy.
Mark Williams, Chief Asia Economist at Capital Economics, estimates that this package could boost annual output by 0.4% compared to earlier projections.
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While it is late in the year, Williams believes that if the new stimulus is implemented swiftly, it could help achieve the “around 5%” growth target.
Chinese stocks are on track for their best week since 2008 amid these stimulus expectations.
However, the economy faces significant deflationary pressures due to a sharp decline in the property market and weak consumer confidence, revealing its heavy reliance on exports in a tense global trade environment.
