PBoC sees benchmark rate cut as last resort, may use other tools

Rate poser: A woman walking past the headquarters of the People’s Bank of China in Beijing. Sources say the central bank may cut market-based rates and lower banks’ reserve ratios but only as a last resort to boost China’s cooling economy. — Reuters

BEIJING: China’s central bank is not yet ready to cut benchmark interest rates to spur the slowing economy, despite cooling inflation and a stronger yuan, which have fanned market expectations of such a move, policy sources told Reuters.

But the People’s Bank of China (PBoC) is likely to cut market-based rates and further lower banks’ reserve ratios (BRR) to boost credit growth and reduce firms’ borrowing costs, according to the sources.