On the initial loans for a period of one year, it recorded about 3.85%

Experts are divided over the prospects of a key rate cut in China

The People's Bank of China may cut its key interest rate to further support the slowing Chinese economy.

archival

Experts and investors have different opinions about the prospects of the People's Bank of China (Central) announcing a cut in China's key interest rate today (Tuesday), to support economic growth.

And “Bloomberg” news agency quoted four analysts at the largest financial brokerage company in China, including analyst Ming Ming, as saying that the main interest rate may be cut for the first time since early last year, in reference to increased support for the slowing Chinese economy.

Meanwhile, four others said they do not expect any change in the key interest rate when the Chinese central bank's monthly statement is released, today.

Last month, the People's Bank (Central Bank) kept the interest rate on initial loans for one year at the level of 3.85%, while it kept the interest rate on initial loans for five years at the level of 4.65%.

The last time the interest rate on the initial one-year and five-year loans was lowered was in April 2020, at which time the interest rate for the one-year loan was reduced by 20 basis points, and the interest rate for the five-year loan was reduced by 10 basis points.

While the data released last Thursday eased fears of a sharp slowdown in Chinese growth, speculation persisted that the Chinese central bank might unleash another round of easing, after its recent decision to reduce the required reserve rate for commercial banks, allowing these banks hundreds of billions of “. The Chinese yuan” to inject it into the economy.

Any move by the authorities will be analyzed by investors looking for evidence of the health of the world's second largest economy, and its implications for demand for goods and trade in the region.

Earlier this month, the Chinese central bank cut the required reserve rate for major commercial banks, with the aim of increasing the amount of cash available for lending to banks, and supporting economic growth.

The People's Bank of China (Central) said that it decided to reduce the required reserve rate by 0.5%, with the decision to enter into force as of this July.

The last time the central bank lowered the reserve requirement rate for major commercial banks was in March 2020.

The central bank said the latest decision will provide one trillion yuan in liquidity to banks.

The data of the Chinese National Bureau of Statistics, issued last Thursday, showed the growth of China's economy during the second quarter of this year by 7.9%, compared to the same period last year, which came less than analysts' expectations, which was 8.1%.

On a quarterly basis, the world's second largest economy recorded a growth of 1.3% during the second quarter of this year, while expectations were for a growth of 1.2%, after a growth of 0.6% during the first quarter of the year.

• The last time the interest rate was reduced on one-year and 5-year primary loans was in April 2020.

Follow our latest local and sports news and the latest political and economic developments via Google news