China is taking measures to combat inflation, lowering interest rates and withdrawing cash from its central banking system.
Countries around the world are struggling with runaway inflation and the beginnings of an economic downturn. China appears to be taking aggressive steps to bolster its economy, with Reuters reporting the country’s central bank has lowered a key interest rate for the second time this year. In addition, the bank withdrew cash from the banking system.
“The rate cut surprises us,” said Xing Zhaopeng, senior China strategist at ANZ, told Reuters.
“It should be a response to the weak credit data on Friday. The government remains cautious about growth and will not let go.”
The People’s Bank of China (PBOC) said the move was to “keep banking system liquidity reasonably ample.”