China Rates Downed by 0.25%

The Peoples Bank of China said that the interest rate cut was to reduce the social cost of financing to promote and support the sustainable and healthy developments of the real economy. It also acted to increase the flow of money in the economy by cutting the amount of cash banks must keep in reserve, effectively freeing them to lend more cash. The central bank's move was broadly welcomed by economists. China cut its main interest rate by 0.25 percentage points to 4.6 percentage after two days of stock market turmoil.