People's Bank of China injects $7b to revive economy

People’s Bank of China injects $7b

People’s Bank of China(PBoC) on Monday cut interest rate on loans to banks by the largest margin in five years, to help the world’s second-largest economy weather the effects of coronavirus.

The bank also injected 50 billion yuan ($7 billion) into the financial system.

PBoC said it launched a 50-billion-yuan reverse repurchase operation and lowered the seven-day reverse repurchase rate from 2.40 percent to 2.20 percent.

It was the “largest cut since 2015 and takes the 7-day reverse repo rate to its lowest on record”, said Julian Evans-Pritchard, senior China economist at Capital Economics.

The deadly coronavirus has claimed almost 34,000 lives worldwide, hitting businesses and consumers.

Its global spread has dampened hope of a quick recovery in export-dependent China, where the pandemic first erupted in December.

The latest move comes as governments and central banks around the world ease monetary policy and unveil titanic stimulus measures worth around $5 trillion to counter the economic impact of the pandemic.

Forecasters warn the pandemic will cause a deep recession.

However, Monday’s move appears to have had little impact on market sentiment.

Shanghai’s key stock index was one percent lower in the afternoon.