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Commentary

China cuts rates again

China slashes rates again (Bloomberg):

China cut interest rates for the fifth time in three months to support the world’s fourth-biggest economy after trade growth collapsed because of recessions in the U.S., Europe and Japan.

The one-year lending rate will drop by 0.27 percentage point to 5.31 percent and the deposit rate by the same amount to 2.25 percent from tomorrow, the People’s Bank of China said on its Web site. The central bank also reduced the proportion of deposits lenders must set aside as reserves by 0.5 percentage point.

Five times in three months! And on “reduced” growth estimates of only 5%. This is surreal – a huge bailout package, massive rate-cuts and still, nothing. Let’s see how it goes.

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