As anticipated, PBC has slashed its one-year medium-term lending facility (MLF) rate by 10 basis points to 2.65% from 2.75%, following a seven-day reverse repo rate cut of 10 bps to 1.90 percent on Tuesday.
These recent moves signal a cut in benchmark lending loan prime rate, which is set to be announced next Tuesday.
The MLF rate cut, the first since August last year, will add a net CNY 37 billion fresh fund into the banking system.
The recent rate cuts by the central bank are set to bolster the world’s second-largest economy as the growth post-Covid loses steam.
In another event, China’s industrial production growth slowed to 3.5% from 5.6% earlier, even falling short of 3.8% consensus.
Retail Sales cooled to 12.7% after gaining 18.4% in the prior month and reported way below 13.7% consensus.
China has maintained the unemployment rate at 5.2%, however, the rate for young people ages 16 to 24 rose to a record of 20.8% in May.
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