China halts massive bond rout with symbolic interest rate cut

The People’s Bank of China on Tuesday lent 400 billion yuan ($57 billion) with its medium-term lending facility and lowered the interest rate on the loans to 3.25% from 3.3%.

BEIJING: China’s central bank has finally helped put the brakes on the downward spiral in government debt.

While Tuesday’s five basis-point reduction in the cost of one-year loans to banks was largely symbolic, it was the first such move since 2016. That was enough to soothe nerves in a market that’s been walloped by the prospect of tighter liquidity in the financial system.