SteelOrbis Shanghai
On September 15, the People's Bank of China announced a reduction in the benchmark interest rate for one-year loans by 27 basis points to 7.2 percent from September 16, with the deposit interest rate remaining unchanged. Also, as of September 25, the deposit reserve ratio of small and medium financial institutions will be adjusted down one percentage point to 16.5 percent; however, the country's large financial institutions will be temporarily exempt from the reserve ratio change.
This is the first downward movement observed in China's interest rate and reserve ratio since October 2004, indicating that the country's macro-controls will move from an emphasis on tightening towards expansion.