China's central bank cuts short-term lending rate for first time in 10 months

The People's Bank of China has cut its short-term lending rate for the first time since August 2022. The interest rate was cut from 2.0% to 1.90% in the bank's seven-day reverse repo operation today, injecting 2 billion yuan into the market. The People's Bank of China cut a key short-term policy rate on Tuesday as the country grapples with disappointing economic data following the failure of the COVID-19 reopening to gain momentum. The PBOC injected 2 billion Chinese yuan ($279.97 million) through seven-day repo, cutting the seven-day reverse repo rate by 10 basis points from 2% to 1.9%, according to the central bank statement. A repurchase agreement (repo) is a type of short-term borrowing rate. It is the central bank's first move since August and signals that monetary easing will continue after the country's largest banks cut deposit rates last week. The move comes ahead of the PBOC's medium-term lending rate decision, which is expected to be announced on Thursday. Meanwhile, the bank's loan interest rate will be announced on June 20.