China's Central Bank makes surprise interest rate cut

The People’s Bank of China unexpectedly cut interest rates, assessing that the economy needs support. The People’s Bank of China (PBOC) unexpectedly cut policy rates for the second time in three months on Tuesday. The People’s Bank of China said it was cutting the interest rate on its one-year medium-term lending facility (MLF) loans worth 401 billion yuan ($55.25 billion) from 2.65% to 2.50%, the biggest rate cut since 2020. The PBOC had previously cut rates by 10 basis points in June. Economists had forecast the rate would remain unchanged. The central bank also conducted a 204 billion yuan reverse repo transaction through a seven-day reverse repo, lowering borrowing costs from 1.9% to 1.8%.