China the worlds largest manufacturing hub، had cut their interest rate by 25 basis points to 5.1% stating the reduction was to boost development.
Last year’s growth rate، 7.4% which is lower than 7.7% of 2013، has been the weakest in the 24 years.
The interest rate cut، the third in six months time would become effective today as it follows other measures designed to jack the growth in China، which includes tax cuts.
China’s current economy slowdown is expected to continue for a few years ahead، and last week International Monetary Fund (IMF) predicted the country’s economic growth rate would stabilize in 6% by 2017.
In addition to this، the official figures of both trade and inflation were released much to the chagrin of the whole economic industry، and it is expected a similar suite is bound to follow for the industrial output and investment data over the rate cuts.
China’s economy slowdown is contributed by property market as well، however this has cooled down following a damaging timeline which had experienced a bubble emerge.
In a statement released، China’s central bank had said “China’s economy is still facing relatively big downward pressure.
“At the same time، the overall level of domestic prices remains low، and real interest rates [interest rates relative to inflation] are still higher than the historical average.”
China’s recent rate cuts have not been fully filtered into the market rates yet، and economists from various corporations of the country have speculated the rate cuts would drop further down along the way، with one stating it would reach as below as 2% before stabilizing.