-People's Bank of China
China's central bank unexpectedly announced interest rates cut on Saturday for the second time in less than four months, in a new attempt to stimulate flagging growth in the world's second biggest economy. The People's Bank of China's decision reflected growing concerns over the nation's economy as it struggles with its domestic problems including a slumping property market and deflationary threat. The cut lowers by 25 basis points both the benchmark one-year loan rate, to 5.35%, and the one-year deposit rate, to 2.5%. Last time the rates were cut was on November 22. Last year, the Chinese economic growth slid to 7.4%, the lowest since 1990. It is expected to drop further this year, and a steep economic decline can raise risk of job losses.
Meanwhile, China's manufacturing output rose slightly in February, but stayed in the negative territory due to ongoing weakness in the nation's economy. China's official manufacturing PMI climbed to 49.9, up from 49.8 in January, according to the China Federation of Logistics and Purchasing. A separate report by HSBC showed a gauge of China's factory activity rose to 50.7 in February, compared with the January's reading of 49.7. Companies that participated in a survey reported the strongest growth of output since last summer while total new business also increased at a faster rate, according to HSBC.
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