China cuts rates for the first time in four years

The People’s Bank of China announced today that it would cut its one-year deposit and one-year lending rates by 25 basis points each, to 3.25% and 6.31% respectively, effective June 8.

This is China’s first rate cut since the end of 2008.

“Today’s rate cut sends a strong message: Beijing will do whatever it takes to support growth this year,” said Qu Hongbin and Sun Junwei, economists at ANZ.

“Get ready for more aggressive easing to be delivered in the coming months – which should generate a modest rebound of GDP growth to above 8.5% in 2H.”